The Government’s changes to the Australian superannuation system have been designed to “enhance stability in the superannuation system”, legislating that the primary objective of the superannuation system is “to provide income in retirement to substitute or supplement the Age Pension” .
1Treasury Superannuation reforms webpage
The following measures have been introduced as part of the reform package - select the links below for further explanations of each measure.
The Transfer Balance Cap (TBC) is a limit that will apply to the total amount of superannuation that can be transferred into a superannuation income stream or pension product (a ‘retirement phase account’).
The current Division 293 threshold is $300,000 until the end of the 2016-17 financial year. This threshold will be lowered to $250,000 from 1 July 2017.
The concessional contributions cap will reduce to $25,000 per annum for everyone regardless of age from 1 July 2017.
An annual cap of $100,000 will replace the current $180,000 cap from 1 July 2017. Additionally, non-concessional contributions may only be paid where the members account balance* is less than $1.6 million.
From 1 July 2017, Transition to Retirement (TTR) income streams will no longer receive the same tax concessions as account based pensions. That is, their investment earnings will no longer be tax free.
From 1 July, the eligibility requirements for individuals to claim a tax deduction on personal contributions will be removed which extends this option to those who do not meet the current definition of ‘substantially self-employed’.
From 1 July 2017, the income threshold to claim a tax offset on spouse contributions will be increased from $10,800 to $37,000.
From 1 July 2017, the Government will introduce the Low Income Superannuation Tax Offset (LISTO).