We finally have some short term certainty about superannuation:
Superannuation Guarantee:
The Superannuation Guarantee requires your employer to make superannuation contributions for all employees both casual and full time earning over $450 per month, and for contractors in some cases, at the rate of 9.5 % of ordinary time earnings until 30 June 2021. The rate is set to increase after this date.
No increase in tax on super fund investment earnings:
Superannuation fund investment earnings are taxed at 15 per cent in accumulation phase, and are tax free when the fund is paying an income stream (previously known as “pension”)
As from 1 July 2017 the government has imposed a cap of $1.6 million on the value of assets that you may take into pension phase, so if you intend to start an income stream and expect to have more than $1.6 million in superannuation as at 1 July 2017, you will need withdraw or transfer the excess.
Concessional contributions caps:
The concessional cap is $25,000 for all age groups fro m1 July 2017.
Non-concessional (after-tax) contributions caps:
The non-concessional contribution cap is $100,000, and if you’re under the age of 65, you can bring forward another 2 years’ worth of contributions, which means you can make up to $3000,000 in non-concessional contributions in a three year period.
Tax-free super benefits for over-60s
If you’re aged 60 years or over, you your superannuation income stream is tax free from most funds (some old style untaxed funds do not provide tax free income streams).
If you are aged under 60 but have met a condition of release your income stream is taxable and has a 15% tax offset available.
Tax exemption for TRIPs remains until 30 June 2017
The Government has removed the tax-exempt status of earnings supporting a transition-to-retirement pension (TRIP) as from 1 July 2017. Until 30 June 2017, the investment earnings on super assets financing a TRIP are exempt from tax.
Low Income Super Tax Offset (LISTO):
LISTO will provide continued support for low-income earners and ensure that generally they do not pay more tax on their super contributions than on their take-home pay.
Eligible individuals will be paid via a contribution benefit into their fund. The effect of the LISTO payment to the individual’s account is to offset the tax their superannuation fund pays on their contributions.
Co-contribution scheme remains in place
If you’re a low or middle-income earner and make personal (after-tax) contributions to your super fund, the government also makes a contribution (called a co-contribution) up to a maximum amount of $500.
The amount of government co-contribution you receive depends on your income and how much you contribute.
Tax treatment of death benefits
The tax treatment of death benefits is unchanged with dependants under the tax laws (such as spouses and children under the age of 18), continuing to receive death benefits free of tax, and non-dependants (such as financially independent adult children) liable for a 15 per cent tax on the taxable component of the death benefit.