Hot Issues
spacer
SMSFs: Our 'hardest' jobs
spacer
ASIC issues alert over big gaps in SMSF trustee knowledge
spacer
Super savings gap for women stuck at 30%
spacer
Statistics for all Australians
spacer
Super set to play bigger retirement role
spacer
Why SMSFs want estate-planning advice
spacer
The power of financial role models
spacer
Assess your retirement financial resources
spacer
Cryptocurrency audits tipped to increase this EOFY
spacer
Time to check your risk exposure?
spacer
Some general interest stats on SMSFs
spacer
Check trust deed to protect super in estate planning
spacer
Survey reveals strong opposition to retirement system changes
spacer
Australia by numbers – Update
spacer
Federal Budget 2018 – Overview
spacer
Your Budget
spacer
4 components of our 2018 Federal Budget
spacer
Tools to help you manage your financial position are available on our site.
spacer
New rules capture SMSFs trading big with cryptocurrency
spacer
Common EOFY slip-ups flagged for SMSFs
spacer
Beware residency rules if moving overseas
spacer
99 pct of SMSFs missing global opportunities
spacer
How to plan for a better retirement
spacer
Australia by numbers - Update
spacer
Determine your retirement goals
spacer
ATO issues update on cryptocurrency compliance traps
spacer
How likely is a global trade war?
spacer
Gig economy spike prompts calls for super policy changes
Article archive
spacer
Quarter 2 April - June 2018
spacer
Quarter 1 January - March 2018
spacer
Quarter 4 October - December 2017
spacer
Quarter 3 July - September 2017
spacer
Quarter 2 April - June 2017
spacer
Quarter 1 January - March 2017
spacer
Quarter 4 October - December 2016
spacer
Quarter 3 July - September 2016
spacer
Quarter 2 April - June 2016
spacer
Quarter 1 January - March 2016
Quarter 4 of, 2016 archive
spacer
Investor habits: The good, the bad and the ugly
spacer
Keeping finances in the family
spacer
The inter-generational financial squeeze
spacer
Merry Christmas for 2016, a Happy New Year and a prosperous 2017.
spacer
ATO set to clamp down on range of super issues
spacer
SME retirement plans in jeopardy, research finds
spacer
SMSFs show restraint in hot residential market
spacer
Investment's building blocks - always worth reinforcing
spacer
Warnings issued on traps with CGT transitional rules
spacer
Meet SMSFs' early and late arrivals
spacer
Beware, the ATO is on the hunt for lifestyle assets
spacer
'Brexit means Brexit' means what?
spacer
SMSFs tipped to be hardest hit by pension changes
spacer
SMSF assets hit record, but funds still hoarding cash
spacer
Markets caution advised as economic bubbles loom
spacer
Stretching retirement income
spacer
Some financial terms explained
spacer
Market Update – September 2016
spacer
Checking in on our 2016 economic outlook - and looking ahead
spacer
Making a fairer and more sustainable Superannuation System
spacer
Going undercover
spacer
‘Winners and Losers’ from new super proposals
‘Winners and Losers’ from new super proposals

 

After the government announced it will be shaking up its budgetary super measures – including scrapping the $500,000 lifetime cap on non-concessional contributions – Rice Warner outlined a list of key “winners and losers” from the new proposals.

               

 

As reported last week, several revisions were announced to the superannuation proposals, the most significant being:

  • The replacement of the $500,000 non-concessional lifetime cap with an annual allowance of $100,000, reduced from $180,000 a year;
  • The introduction of restrictions on non-concessional caps when a balance of $1.6 million is reached; and
  • Non-concessional contributions will be allowed up until the age of 74, increased from 65. Additionally, working individuals will be able to make concessional contributions until the age of 74 and non-working individuals until age 65.

With a more concrete view of what the superannuation system will look like in the future, Rice Warner said it is clear who will benefit or be disadvantaged from the proposals.

“Younger superannuants or those with smaller balances wishing to accumulate significant tax-concessional retirement savings will find it easier now to reach the $1.6 million cap for pension accounts. Given the reduced cap on concessional contributions [of] $25,000 a year, there will be an increased importance of non-concessional contributions in augmenting balances,” Rice Warner said in a statement.

“Members who have already made more than $500,000 in non-concessional contributions since 2007 but have less than $1.6 million in their superannuation account will also be better off. They can continue to make post-tax contributions to their superannuation account.”

With changes affecting those with large balances tightened, the losers will be wealthier Australians.

Members with balances exceeding $1.6 million will be unable to make non-concessional contributions, while those who have retired and are older than 65 will not be able to make concessional contributions out of investment earnings.

“The government was going to allow those over 65 to make non-concessional contributions as long as they remained below the lifetime limit of $500,000. This has now been restricted to those who are still working between 65 and 74, [although] the definition of ‘working’ has a low bar – you only need 40 hours within a 30-day period once a year,” Rice Warner said.

However, despite these revisions, Rice Warner said only a minority of Australians will be affected.

“Overall, these groups represent only a small fraction of the superannuation population. For the majority of members, interaction with super will be business as usual and they will wonder what the fuss is all about.” 

 

JACK DERWIN
Monday, 19 September 2016
www.smsfadviser.com