Superannuation reforms 2016 – most significant super reforms in a decade and how to benefit from the opportunities it brings
After months of uncertainty, consultations and amendments, the superannuation reforms announced in the 2016 Budget finally received Royal Assent. These changes are being hailed as the most significant super reforms in a decade since the Simplified Superannuation reforms of 2007. It’s important that you understand the impact of these changes and plan your finances in the best possible way moving forward.
These changes mean that some opportunities are only available to you prior to 30 June 2017. This may be the last opportunity if you are under age 65 to contribute up to $540,000 or $1,080,000 as a couple to your super accounts this financial year. This also creates a chance for some couples where one partner has a lot more in super than the other, to even up your balances before 30 June.
Other reforms introduced such as the Low-Income Superannuation Tax Offset, improving access to concessional contributions, allowing catch-up concessional contributions, extending the spouse tax offset and enhancing the choice in the retirement income products, will provide enhanced opportunities after 30 June 2017.
Some of these changes and related strategies to consider prior to 30 June 2017 have been summarised below:
After-tax / Non-Concessional Contributions
- Contribution Cap and ‘Bring Forward’ rule
Speak to your Adviser to work out HOW MUCH capacity you have to contribute!
2. Tax Offset for Spouse Contributions
Pre-tax/ Concessional contributions (included Superannuation Guarantee, Salary Sacrifice and personal tax deductible contributions)
- Contribution Cap
Speak to your Adviser to work out if maximising your concessional contributions this year will be tax effective.
2. Options to Catch-up on Concessional contributions
3. Tax Deduction for Personal Contributions
Speak to your Adviser to ensure you are maximising your contributions and related deductions.
4. Division 293 Threshold
- Account Based Pension
Speak to your Adviser to work out what is the best way forward if you have more than $1.6M in pension phase.
2. Transition to retirement (TTR) Pension
Speak to your Adviser to assess how your defined benefit pension will impact your other superannuation accounts.
2. Anti-Detriment Payment
Speak to your Adviser to see if you can access this concession.
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