Cuts to Concessional Contributions Caps
The current concessional cap is $30,000 for aged 49 and below and $35,000 for 50 years and above. From 1st July, 2017 the Government is proposing to decrease the concessional cap to $25,000 per year for all ages.
The concessional cap is the total of all before taxed contributions paid into Super. This means a combined total of SG Contributions, Salary Sacrifice and any Employer Additional Contributions.
There is some flexibility to the above, whereby if you have a Super Balance less than $500,000, the Government is proposing to allow unused Concessional contributions caps to be rolled over for up to 5 years. This means if you have not contributed up to the amount of $25,000 in the year, you can “make up” the difference in subsequent years over a five year period.
Life Time Cap of $500,000 on Non-Concessional Contributions
The proposal is to, effective immediately, impose a $500,000 on non-concessional (after tax) contributions. If the cap has been exceeded prior to this, you would not be required to take the excess out of super.
Lowering the Threshold for Tax Concessions on Super Contributions
From 1st July 2017, the Government proposes that anyone with combined income and concessional superannuation contributions of more than $250,000 each financial year will now pay 30% (as opposed to 15%) tax on their superannuation contributions each financial year.
Low Income Super Tax Offset
Previously LISC, for income earners that earn less than $37,000 per year has remained. This is an amount of up to $500 per year that the Government will deposit into your Super account if you contribute after tax earnings.