The Federal Budget Proposals 2016 vs Super


The Federal Budget Proposals vs Super

Key Budget Proposals:


If you have a lower earning spouse:

  • From 1 July 2017: The spouse contribution tax offset of up to $540 will be available to individuals contributing to their spouse’s superannuation fund who can earn up to $37,000 per annum (up from $10,800 per annum).


If you earn less than $37,000 pa


  • From 1 July 2017: A Low Income Superannuation Tax Offset (LISTO) of up to $500 will be available to those with adjusted taxable income below $37,000 per annum.


If you contribute money into super:


  • From 1 July 2017: The concessional contributions (eg salary sacrifice and tax-deductible contributions) cap will reduce to $25,000 per year (down from $30,000 per year for those under age 50 and $35,000 per year for those aged 50 and above). This will also apply to members of defined benefit schemes.


  • From 1 July 2017: If you have less than $500,000 in super you will be able to accrue unused concessional contributions cap amounts (up to 5 years) and carry them forward for use in later years.


  • From 1 July 2017: If you earn above $250,000 per year (reduced from $300,000 per year) you will have to pay an additional tax of up to 15 percent on concessional contributions, which is in addition to contribution tax of 15 percent paid. Similar measures will apply to high earning members of defined benefit funds.


  • From 1 July 2017: If you are under age 75, regardless of your employment status, you will be able to claim an income tax deduction for personal superannuation contributions made in an income year. These amounts will count towards the concessional contributions cap and will be subject to contributions tax.


  • From 7:30 pm (AEST) on 3 May 2016, non-concessional contributions (eg after-tax contributions into super) will be capped at a lifetime amount of $500,000 (indexed). The lifetime cap will replace the existing annual non-concessional contributions caps ($180,000 per annum and the $540,000 ‘bring-forward’ rule) and will include non-concessional contributions made since 1 July 2007.  If the new lifetime cap has been exceeded prior to 7:30 pm (AEST) on 3 May 2016, those amounts can be retained in super however no further non-concessional contributions can be made. Where the lifetime cap is exceeded after this date, any excess will need to be withdrawn, or penalty arrangements will apply.


Note: This is not a complete list of all the budget proposals