Super changes - What am I allowed to do with my super?

Dec 15, 2016

Changes to super recently passed through Parliament and are now law. The changes originally put forward in the budget were significantly altered leading to confusion about what can and cant be done. Below is a summary of what you are allowed to do before and after 30 June 2017.


What is allowed before 30 June 2017

What is allowed after 1 July 2017

Concessional (Tax deductible) Contributions for people under 65 or who meet the work test and are under 75

You are eligible to contribute up to $35,000 per financial year if you are 50 or over. If you are under 50 you are eligible to contribute up to $30,000.

You are eligible to contribute up to $25,000 per year

If more than 10% of your income comes from employment, this type of contribution can only be made as part of your employer super guarantee contribution or as a salary sacrifice.

The employment restriction will be removed so anybody can contribute personally to super and claim a tax deduction

If you contribute less than the $35,000 cap amount, no entitlement carries forward to following years.

From 1 July 2018, If you contribute less than the $25,000 cap amount, the unused amount of your cap can be utilised for up to five years if your total super balance is less than $500,000.

Non-Concessional (After tax) Contributions for people under 65 or who meet the work test and are under 75

You are eligible to contribute up to $180,000 per financial year regardless of how much you have in super.

You are eligible to contribute up to $100,000 per financial year if the total of your super balances at the start of the Financial Year are less than $1.6m. If your balance is greater than $1.5m you will only be eligible to contribute the difference between $1.6m and your balance.

Non-Concessional (After tax) Contributions for people under 65

You are eligible to bring forward the next two years of your contribution cap enabling a contribution of up to $540,000 in one financial year regardless of how much you have in super. If you contribute less than $540,000 but more than $180,000 before 30 June 2017 the amount you can contribute over the next two years will be limited to $300,000 less the amount you have contributed in the 2017 Financial Year.

You are eligible to bring forward the next two years of your contribution cap enabling a contribution of up to $300,000 in one financial year if the total of your super balances at the start of the Financial Year are less than $1.6m. If your balance is greater than $1.3m you will only be eligible to contribute the difference between $1.6m and your balance.

Pensions

There is no limit on the amount you can have in pension phase.

A $1.6m transfer balance cap will be introduced. This means the total of any pension balances you have at 1/7/16 plus the starting balances of any future pension accounts you start must be within the transfer balance cap amount of $1.6m. Future earnings, losses or pension payments do not affect the amount of cap you have used. If you exceed the cap at 1/7/16, the excess must either be withdrawn or rolled back into accumulation phase. If rolled back into accumulation, the balance stays in the super environment where it's earnings are taxed at 15%.

Transition to Retirement Pensions (TTRs)

Earnings on TTRs are exempt from tax

Earnings on TTRs will be taxed at 15%.

Spouse Contribution Offset for spouses under 65

You can make a contribution of up to $3,000 on behalf of your spouse and receive a tax offset of up to $540 if your spouse’s income is less than $13,800

You can make a contribution of up to $3,000 on behalf of your spouse and receive a tax offset of up to $540 if your spouse’s income is less than $40,000