Federal Budget 2016: Superannuation - some good news

Federal Budget 2016: Superannuation - some good news

Australian accountant meets her clients to discuss some good news on superannuation

Currently if you earn a salary from an employer you are generally deemed to be receiving employer superannuation support, and tax law has prevented you from claiming personal tax deductions for any personal superannuation contributions you have made.

From 1 July 2017, you will be able to contribute up to your cap, either via your employer (as normal superannuation guarantee / salary sacrifice contributions) or by a direct contribution to your superannuation fund.

Note:

  • You will be able to claim for your personal superannuation contribution (and of course, this can only make sense if your marginal tax rate and Medicare levy exceeds the normal 15% superannuation contribution tax rate;

  • Your total contributions, via your employer and your own contributions, should not exceed $25,000 in order to stay within the new cap that will apply from 1 July 2017.

Other good news:

  • Currently a taxpayer may contribute to their spouse’s superannuation fund and if their income is below $10800, can access a tax offset of up to $540.  From 1 July 2017 this threshold will increase to $37000;

  • Current restrictions affecting people aged 65-74 to contribute to superannuation will be abolished;

  • ‘all individuals’ up to age 75 will be able to contribute to superannuation and claim deductions for personal superannuation (up to the concessional cap of $25,000 including any amounts from employers)

From 1 July 2017, if you don’t access your full concessional superannuation cap for up to 5 years, and your superannuation balance is less than $500,000, you can catch-up with a personal contribution.  For example, if you don’t use $10,000 for each of 4 years, then you will be able to contribute a lump-sum amount of $40,000 and claim a deduction for the amount.  This could be ‘extremely’ useful for women returning to the workforce after child birth and other people not accessing the superannuation system for some years, such as non-residents, and for people who realise a capital gain who can reduce their taxable income back-down again, by making a deductible superannuation contribution.  

Federal Budget 2016: Company and Business Highlights

Federal Budget 2016: Company and Business Highlights

Federal Budget 2016: Marginal Tax Rate Changes and other Personal Tax Matters

Federal Budget 2016: Marginal Tax Rate Changes and other Personal Tax Matters