Latest superannuation changes: 2017/2018 guide, July 13, 2017 by Trish Power from www.superguide.com.au
Substantial changes to the superannuation rules took effect from 1 July 2017
Have you investigated how the super changes will affect your superannuation and retirement plans for the 2017/2018 year, and for future financial years?
At the same time, many of the super rules in place have not changed from previous years, for example, the rate of compulsory employer super contributions that must be paid remains at 9.5%, and tax-free super for over-60s is still available (up to a limit, and excluding many retired public servants).
A summary of the July 2017 superannuation changes which took effect from the start of the 2017/2018 year, is set out below. You can read more detail on each super change by clicking through to supporting pages.
In addition, for a super checklist covering all of the main super rules applicable for the 2017/2018 year (including rules that have not changed since the 2016/2017 year) see SuperGuide article Superannuation checklist: What rules apply for the 2017/2018 year? For a list of the latest super rates and thresholds, see SuperGuide article Superannuation rates and thresholds for 2017/2018 and 2016/2017 years.
If you are seeking background information on why and how these superannuation changes came about, see the section at the end of this article.
You can scroll down the page, or click on the links in the bullet list below to find out about the superannuation changes, which took effect since 1 July 2017.
The superannuation changes are:
- Age Pension changes affect retirement plans
- Annual concessional (before-tax) contributions cap reduced to $25,000
- Expansion of tax-deductible super contributions to all Australians
- Annual non-concessional (after-tax) contributions cap reduced to $100,000
- Increase in income threshold for spouse superannuation contributions tax offset to $37,000 (and $40,000)
- Low Income Superannuation Tax Offset replaces LISC
- Introduction of a $1.6 million transfer balance cap
- Removal of tax exemption for transition-to-retirement pensions (TRIPs)
- Tax hike for more Australians: 30% tax on concessional (before-tax) super contributions
- Preservation age now at least 57 years
- Age Pension increases to at least 65.5 years
- SMSF trustees now face bigger penalties (from 2017/2018 year)
- Introduction of First Home Super Saver Scheme
- Removal of option to treat a pension payment as a lump sum payment, for tax purposes
- Removal of anti-detriment provisions
- Extension of tax exemption for other types of retirement products
- Non-super change: Delivery of personal income tax cuts
- Proposed introduction of non-financial superannuation changes
Note: Taking effect from 1 July 2018 (subject to legislation), the government has announced an incentive for over-65s to downsize their homes, and make super contribute up to $300,000, outside the usual non-concessional (after-tax) contributions cap (for more information, see SuperGuide articles Over 65? Sell your home and contribute more to super and Contributing super by downsizing your home: 10 issues you need to consider.
If you’re inclined to read legislation, the name of the Act is, Treasury Laws Amendment (Fair and Sustainable Superannuation) Act 2016 (Act No 81).
For more information on all of the super rules applicable for the 2017/2018 year, including rules that did not change from 1 July 2017, see SuperGuide article Superannuation checklist: What rules apply for the 2017/2018 year?.