Superannuation reforms 2016 – most significant super reforms in a decade and how to benefit from the opportunities it brings

Superannuation reforms 2016 – most significant super reforms in a decade and how to benefit from the opportunities it brings

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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

  1. 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

Speak to your Adviser to work out if you could benefit from the tax offset by making a super contribution into your spouse’s account.

 

Pre-tax/ Concessional contributions (included Superannuation Guarantee, Salary Sacrifice and personal tax deductible contributions)

  1. 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

Pension Phase

  1. 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 work out what is the best way forward and if a TTR is still appropriate for your needs going forward.

 

Miscellaneous

  1. Defined Benefit Schemes

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.

 

Disclaimer:
This information has been prepared by Primestock Securities Limited ABN 67 089 676 068, AFSL 239180 (“Prime”). Prime accepts no obligation to correct or update the information or opinions in it. This information does not take into account your objectives, financial situation or needs. Before acting on this information, you should consider whether it is appropriate to your situation. It is recommended that you obtain financial, legal and taxation advice before making any financial investment decision. Prime is bound by the Australian Privacy Principles for the handling of personal information.

 

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By | 2017-06-16T15:16:15+00:00 December 6th, 2016|Retirees, Superannuation incl. SMSF|0 Comments

About the Author:

Prime is an Integrated Wealth Management Firm for business owners and family groups. Prime’s goal is to become the Premier Partner to Accountants for Growth, Succession and Integrated Wealth Management and to deliver personalised advice to clients for a secure financial future.