New superannuation measures: information for members
- The federal government has announced a number of new measures to superannuation in their Mid-Year Fiscal and Economic Outlook
- New measures impact areas including the superannuation guarantee age limit and concessional contributions caps
- New measures may affect the information Chartered Accountants provide for clients.
In their Mid-Year Fiscal and Economic Outlook last month, the federal government announced a number of changes to superannuation.
The Institute’s Head of Superannuation, Liz Westover, says many of the changes will affect Chartered Accountants and the advice they provide to their clients.
'Members should take note of the new measures and timeframes to ensure they provide accurate information for clients,' she says.
Superannuation guarantee age limit
While there has been some confusion about this in the past, the government has confirmed that as of 1 July 2013, there will be no upper age limit on the payment of the superannuation guarantee to employees. Previously, it was not payable to employees over the age of 70.
Ms Westover says this is a positive outcome for individuals saving for retirement. 'Superannuation guarantee payments will now be available more widely; this is a particularly valuable outcome for those who are compelled to stay in the workforce longer than previously anticipated,' she says.
Superannuation trust deed clauses
The government has provided additional information to ensure trust deed clauses cannot be used to alter the amount of money recorded in a superannuation account and thereby enable individuals to avoid penalties for what would have been excess contribution caps.
Concessional contributions caps
The superannuation concessional contributions cap will remain at $25,000 in 2013-14. Under the existing conditions, this cap is subject to indexing in $5000 increments and was due to be indexed in 2013-14. The government has announced a deferral of the $5000 increment to the following year.
Reduction in minimum payments for account-based pensions
The government has extended the reduction in the minimum payment for pensions from superannuation accounts by 25% for 2012-13. Pension drawdown relief has been taking place for a number of years and was due to be returned to normal rates by 2012-13.
Low income superannuation contribution
As the government previously announced, individuals earning up to $37,000 will effectively pay no tax on their superannuation guarantee contributions from 1 July 2012. Under the low income superannuation contribution (LISC), the 15% contributions tax will be refunded into their superannuation accounts.
More information is available on the federal government’s Budget website.
Article last updated 10 November 2015
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