The most significant changes to superannuation for the last ten years are now law. The changes announced in the May 2016 Budget and modified in September have finally been set out in legislation.
The changes affect how much you can contribute to super and limit the tax concessions available when you are receiving a pension from your fund
. For example, from 1 July 2017;
- Concessional Contributions (before tax contributions) will be limited to $25,000
- Non Concessional Contributions (after tax contributions) will be limited to $100,000 for people with super balances less than $1.6 million
- Pension account balances cannot exceed $1.6 million
It is important to consider if you are going to be affected by these changes and what steps can be taken to reduce the impact of the changes and provide you with the best outcome. Changes like making additional contributions, restricting pensions or revising reversionary pensions and death benefit nominations may reduce the impact of these changes.
If you are in receipt of a defined benefit pension (e.g. SuperSA pension or Commonwealth Government Pension
) and also have money invested in another superannuation fund such as a Self Managed Superannuation Fund (SMSF) you need to be aware of the tax implication of this new legislation.
The changes will also significantly affect your estate planning arrangements
. For example, it may be preferable to take a lump sum from your superfund before 1 July 2017 or to vary the terms of any existing pensions to better meet your estate planning purposes.
If you are affected by these changes, it is important to start planning as soon as possible so that all necessary actions are in place prior to 1 July 2017
If you are currently operating a SMSF, it may also be necessary to update your Fund Deed
so that if any changes are required, your Deed will include these changes and provide the (trustee's) with the power to do so.
Did you know JSA Accounting is a fully compliant fee for service financial planning business
; we are able to provide advice and services in the following areas;
- Retirement planning
- Financial planning and recommendations for investment of funds.
- Aged Care advice and planning
- Estate planning including preparation/review/update of wills.
If you would like to discuss any of these matters, or to book an appointment to review your current situation or review your superannuation deed, please call our office on 08 83225088 or email [email protected]
CLICK HERE for the superannuation reforms at a glance information sheet