After releasing most of the big changes in the last few weeks, including proposed reforms to superannuation and increases to the Medicare Levy, the Government didn’t have much left to announce in the 2013/14 Budget last night.
The main changes to Superannuation (announced prior but reiterated in the budget)
Taxation of contributions in a super fund for high income earners
From 1 July 2012 for those earning over $300,000, the Government will be imposing an additional tax of 15% on all of your super contributions meaning a tax rate of 30% applies.
Maximum Super contribution limit changed
Previously the government announced from 1 July 2014 the maximum concessional super contributions cap would be $50,000 for people with less than $500,000 in total superannuation savings. This has now has been removed.
From 1 July 2013, a higher concessional contribution cap of $35,000 that will apply to people aged 60 and over.
From 1 July 2014 the higher cap will then become available to people aged 50.
From 1 July 2018 the higher cap will apply regardless of age
The concessional cap will not be indexed in future years and it’s projected the current $25,000 concessional cap will reach $35,000 by July 2018.
Excess super contributions treatment softened-reformed
Any excess super contributions will be able to be withdrawn by individuals and this amount will be taxed at the individual’s marginal tax rate. For anybody on a marginal tax rate less than 45% this is a saving. However interest amount will also apply to the excess amount, reflecting the delay in collection by the ATO.
Retirement Income reform-Concessional taxing of super fund earnings
The government’s announcement of 5 April 2013 has been re-confirmed.
Please watch my video review of the topic by following this link and do not hestitate to contact Azure Group if you have any concerns about your personal situation. You can reach us on (02) 9238 1188 or ourteam@azuregroup.com.au.
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