Federal Budget Announcement - 8 May 2012
The 2012 Federal Budget has highlighted two significant changes for members with super, notably around concessional contributions limits.
1. Concessional contributions caps (for employer contributions and salary sacrifice) will be $25,000 for the next two years (from 1 July 2012). There had been previous mention of a $50,000 cap for those with less than $500,000 in super however that has now been deferred.
2. For those who earn more than $300,000 of assessable income per year there will now be a 30% tax on contributions (currently 15%).
These are not yet law but are expected to be passed shortly.
We will be communicating more detail to all our members regarding the announcement, particularly around the concessional contributions cap of $25,000.
Prior to the budget the government had announced, and passed, some additional reform.
Changes to Government Co-contributions.
From 1 July 2012, the maximum government co-contribution will be halved to $500.
For those eligible, every $1 they contribute to their superannuation after tax will be met by up to $0.50 government co-contribution, up to a maximum of $500.
New Low Income Superannuation Contribution.
To coincide with the changes to the government co-contribution, an amount of up to $500 will be paid to eligible people earning less than $37,000 per year. This effectively compensates the member for the contributions tax they would have paid.
Changes to draw down relief.
The government has also indicated that drawdown relief for income streams will be extended for another year due to the volatility of investment markets.
The standard minimum payment percentages and the temporary 75% reduced minimum payment percentages are as follows:
2011/12 and 2012/13
| Under 65
|95 or more
If you have any questions regarding these changes, please contact us to arrange to speak with a Member Education Consultant.
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