Changes to super are coming

The Government's made some changes to super that could affect you from 1 July 2017. Work out what these changes could mean for you.

I'm adding to my super

Lower limits on how much you can add

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Before-tax

(includes employer payments and salary sacrifice)

NOW
$30k
a year if you're under 50

15% tax (or 30% tax if your income and before-tax super payments reach $300k)

NOW
$35k
a year if you're 50+

15% tax (or 30% tax if your income and before-tax super payments reach $300k)

FROM 1 JULY 2017
$25k
a year for everyone*

15% tax (or 30% tax if your income and before-tax super payments reach $250k)

*From 1 July 2018, if your super payments are below $25,000 and you have less than $500,000 in super at the end of the financial year, you'll be able to make extra payments up to the limit within the following 5 years.  

After-tax

(includes amounts added from your take-home pay)

NOW
$180k
a year if you're over 65

or $540k in any 3-year period if you're under 65

FROM 1 JULY 2017
$100k
a year if you're over 65

or $300k in any 3-year period if you're under 65*

*From 1 July 2017, the most you can have in super is $1.6 million (including any retirement income stream accounts). So you can only add to your super up to this limit.

 

Tax deductions for personal payments to super

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At the moment, you usually need to be self-employed to get a tax deduction for payments you make to super. But from 1 July 2017, anyone under 75 may be able to claim a deduction for super payments up to $25,000.

 

This $25,000 limit includes any employer and salary sacrifice super payments, and if you’re between 65 and 69 you need to have worked at least 40 hours within 30 consecutive days during the year.

 

Tip: See how you can find a little extra to put towards your super - keep in mind you need to apply within specific time limits, so get in touch to work out your options today.

My partner or I earn less than $40,000

Continuing support for low-income earners

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If you earn less than $37,000 a year, you can still get a refund of up to $500 a year to offset the contribution tax paid on your super. The money will go back into your super account.

 

Tip: Boosting your super can be one of the most tax-effective ways to save for your retirement. See how tax on super differs to other long term investments.

Extending the spouse tax offset

Male and female coworkers on a cosnturction site in hi-vis

From 1 July 2017, you could be eligible for a tax offset of up to $540 if you add to your spouse's super when they're earning less than $40,000 a year - up from the current income limit of $13,800 a year.  

 

To qualify, your spouse needs to:

  • be under 65, or
  • have worked at least 40 hours within 30 consecutive days during the year, if they're aged between 65 and 69.

Tip: The tax offset goes both ways, if your spouse adds to your super. Learn more about the ways you can contribute, or give us a call to work out your best approach.

I’m retired or planning to retire soon

New tax on transition to retirement earnings

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Currently, investment earnings on all income stream accounts are tax-free. But from 1 July 2017, earnings on income stream accounts set up under a transition to retirement strategy (TTR) will be taxed at 15%, in line with super (accumulation) accounts.

Even with this change, a TTR strategy can still be a great way to get your super working harder as you approach retirement. You must have reached your preservation age to start a TTR strategy – give us a call or see how you can plan for future now.

Tip: If you've retired recently – let us know! Otherwise, you could be taxed much more than you need to.

Retirement income stream accounts capped at $1.6 million

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There’s currently no limit on how much super you can have in a retirement income stream account. But if you’re fully retired, a $1.6 million cap will apply to both new and existing income stream accounts.

 

To avoid penalty, any amount over the cap will need to be withdrawn or transferred to a super (accumulation) account by 1 July 2017 (or by 1 January 2018 if the excess is under $100,000).

We'll be contacting members who we think might exceed the cap with their Cbus account. But don't forget, you might have money outside of Cbus which also needs to be considered.

 

Tip: The cap applies to each person, which means a couple could have up to $1.6 million each in separate income stream accounts.

We’re here to help

Call our Cbus Advice Team on 1300 361 784

Press 4 to be connected

8am to 8pm Monday to Friday AEST/AEDT

Email: advice@cbussuper.com.au

Or use our online form to book a time for our Advice Team to call you.