The federal government has made significant changes to its superannuation package, including dumping plans for a backdated, lifetime cap of $500,000 on non-concessional contributions.
A full list of the proposed changes now follows:
- The $500,000 cap backdated to 2007 has been removed and replaced by a mechanism in which people will be able to make both concessional and non-concessional contributions until the cap of $1.6 million in a super retirement account is reached
- There will be a yearly cap of $100,000 on non-concessional contributions, down from the current $180,000-a-year-cap, until the $1.6 million is reached. After that, there can be no more non-concessional contributions, even to an accumulation account
- People aged under 65 can continue to bring forward three years worth of non-concessional contributions in recognition that such contributions are often made as lump sums
- The government has scrapped a proposal to remove restrictions such as minimum work requirements on people aged between 65 and 74 wishing to make voluntary contributions to their super
- The government has also delayed by a year (from July 1, 2017 to July 1, 2018) plans to allow people with interrupted work patterns to roll over unused concessional contributions from the previous year
- The super legislation will be introduced before the end of the year
- The changes are due to start on July 1, 2017.
Without doubt some common sense has prevailed and although slow to listen to the message that was sent on July 2, 2016 has finally been heard.