Changes to superannuation
Superannuation remains an effective way to save for retirement post-budget.
One key change to take effect from 1 July 2014 is the reintroduction of indexation of contribution caps. The relevant caps are shown in the table below:
Table 1: Superannuation contributions caps
|
|
Concessional contribution cap |
Non-concessional contribution cap | |||
|
Year |
Aged under 50 years |
Aged 50 to under 60 years |
60 years and over |
Annual limit |
Three year bring forward |
|
2012-13 |
$25,000 |
$25,000 |
$25,000 |
$150,000 |
$450,000 |
|
2013-14 |
$25,000 |
$25,000 |
$35,000 |
$150,000 |
$450,000 |
|
2014-15 |
$30,000 |
$35,000 |
$35,000 |
$180,000 |
$540,000 |
If you inadvertently make excess non-concessional (after tax) contributions into your superannuation funds after 1 July 2013, you will be able to withdraw these amounts as well as associated earnings from the fund. If you choose this option, the excess contributions penalty tax will not apply. Instead, any related earnings will be taxed at your marginal tax rate.
This brings the treatment of excess non-concessional contributions broadly in line with that for excess concessional contributions, where you can choose to withdraw the excess contribution and be assessed at marginal tax rates on the contribution.
If you leave excess non-concessional contributions in your superannuation fund, the current tax treatment will continue to apply and these amounts will be taxed at the top marginal rate.
And while the superannuation guarantee rate will increase to 9.5% on 1 July 2014, as currently legislated, but it will remain at this level until 30 June 2018.