7 December 2006 
 
The Institute of Chartered Accountants in Australia supports the final legislation detail for the Government’s superannuation overhaul introduced to Parliament today which sees tax abolished on benefits paid from superannuation for anyone over 60 years old. 
 
It is anticipated that the new legislation will be passed in for March allowing a three-month transition period. 
 
“The legislation reflects the lobbying efforts of the Institute and ongoing consultation with the Government. While there is a lot of work ahead, it is reassuring to those in the industry managing Australians’ superannuation funds to have clarity and can begin the transition to the new regime. For the next three months we will work closely with our members involved in superannuation to help ease this transition,” said Hugh Elvy, Financial Planning and Superannuation Manager, Institute of Chartered Accountants in Australia. 
 
The new legislation is part of the ‘Plan to Simplify and Streamline Superannuation’ released in the budget earlier this year.  
 
Changes to simply superannuation also include: 

• Subject to any applicable work test, up to $1m of undeducted contributions can be made between 10 May 2006 and 30 June 2007
 

• From 1 July 2007, there will be a $150,000 annual limit on undeducted contributions. Those aged less than 65 can make up to $450,000 of undeducted contributions every 3 years
 

• Indexation of contribution caps to Average Weekly Ordinary Time Earnings (AWOTE) in increments of $5,000. Currently, the annual age-based deduction limit is indexed to AWOTE and ranges from $15,260 for those aged under 35 and $105,113 for age 50 and over
 

• A lifetime limit of $1m (indexed) from the sale of assets that qualify for the small business capital gains tax exemptions can be contributed to superannuation. This limit applies in addition to the contribution caps
 

• For defined benefit schemes, existing members (as of 5 September 2006) with notional contributions above the $50,000 cap will be deemed as having made the maximum amount of deductible contributions. This transitional arrangement ceases once the rules of the defined benefit scheme are changed to increase member benefits.