For the third part in the series of superannuation changes we are going to focus on the changes to the concessional contribution cap (which is where your personal deductible contribution, salary sacrifice and employer SG contributions count towards) and what actions you need to take to ensure you are compliant with these new rules.
From the 01 July 2017 the amount of tax deductible superannuation contributions that you can make is set to change. The below table outlines the changes:
|Age*||Current||From 01 July 2017||Decrease|
|50 or over||$35,000||$25,000||$10,000|
*The age of the individual at the beginning of the financial year.
As you can see the reduction in the cap amounts is quite substantial, especially for those over the age of 50. You will need to be prepared for these changes and review the following items:
- Review your pre-tax superannuation contributions and salary sacrifice arrangements. If you are already making the maximum allowable contributions for your age, you will need to notify your employer and vary the contributions down in line with your new maximum. (If your contributions stay at the maximum of $35,000, your assessable income will be varied to include the extra $10,000. You will be levied on this amount at your marginal tax rate, so assuming you are in the top tax bracket, this is an extra $4,900 in tax)
- Review your retirement plan and check how it will affect the assets you own and that they are in the right classes. Also to see if your new contribution limits will allow you the retirement you are seeking.
If any of the above affect you and your need assistance or you have any questions on the changes please feel free to contact Melanie or Renee.
General Advice Warning: The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product.