Post-Election Super – What do you need to know?
by Tony Bates
Director | Bates Cosgrave Wealth Management ASFL 500640
When Treasurer Scott Morrison announced a series of superannuation measures on Budget Night, many Australians asked: "How will this affect my future wealth?"
First the Reserve Bank of Australia cut cash interest rates and banks actually passed this on to home loan rates within hours. Fantastic news for borrowers but yet more pain for self-funded retirees.
Then Budget Night itself produced some pretty fundamental changes, especially to superannuation and also in areas such as company tax rates, personal tax thresholds. This has been the biggest Budget in 10 years. In fact, the 2016 Budget seeks to unwind the very generous measures announced in the 2006 Costello Budget.
However, as Australians have got used to the generous concessions, the changes that are due to come into effect - election result pending, of course - are causing concern.
Only one of the superannuation measures introduced in the Budget has an immediate effect, which is the lifetime transfer limit on non-concessional contributions of $500,000.
If you are considering making additional non-concessional contributions ahead of the end of financial year, you possibly should very carefully consider all consequences before doing so.
All other superannuation measures announced in the Budget will only come into effect from 1 July 2017 and remain subject to the election outcome and resulting legislation.
There will be time to seek advice and potentially rearrange your affairs between Election Day and 30 June 2017.
Before you add in your contributions, talk to your advisor to ensure you're not going to be caught unawares or create unintended consequences.
Otherwise all pre-existing limits and rules remain in place for FY2016 and FY2017.
- For clients aged 49 or below on 1 July 2015, the maximum concessional contribution to super by 30 June 2016 is $30,000
- For clients aged 50 or more on 1 July 2015, the maximum concessional contribution to super is $35,000
- Concessional contributions include SGC employer contributions, salary sacrifice and all contributions for which a deduction is claimed.
Rules which remain in place include the work test for those aged 65, the 10% rule for the self-employed and the ability to split contributions with a spouse.
Depending on the election outcome, this may be the second last chance to put more than $25,000 into super so clients should make the most of this opportunity including the opportunity to split contributions
Want more information about Bates Cosgrave Wealth Management? Contact Tony Bates on 02 9957 4033, find out more on Your Wealth or download our BCWM brochure.
The information (including taxation) contained within this document is of a general nature only and neither represents nor is intended to be personal advice on any particular matter. Bates Cosgrave Wealth Management strongly suggests that no person should act specifically on the basis of the information in this document, but should obtain appropriate professional advice based on their own personal circumstances. Licensed under AFSL 500640
This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.