The Government has announced some changes to the superannuation proposals originally announced in the May 2016 Federal Budget. While these are just proposals, and therefore not law, it is likely that they will be introduced into Parliament as a Bill.
The Coalition’s proposal is to reduce the existing annual non-concessional (after-tax) contributions cap from $180,000 per year to $100,000 per year. Australians who are under 65 years of age will continue to be able to use the three-year bring forward rule (bring forward three years’ worth of non-concessional contributions ($300,000) from 1 July 2017.
The new suggestion replaces the original proposal for a $500,000 lifetime cap on non-concessional contributions announced in the May 2016 Federal Budget, which was opposed by parts of the super industry.
In the meantime, Australians can continue to put $540,000 into their super accounts between now and 1 July 2017.
Individuals with a superannuation balance of more than $1.6 million will no longer be eligible to make non-concessional contributions from 1 July 2017. This revised proposal is said to allow more individuals to build a superannuation balance cap to attain a $1.6 million pension balance cap in the retirement phase.