In the 2016-17 budget, the government announced some major reforms to the superannuation system.

Following extensive consultation, the government has decided to amend the changes in order to support Australians in investing in superannuation with the main objective of providing an income in retirement.

The changes announced by the government this morning are:

The $500,000 lifetime non-concessional contribution cap (announced in the 2016-17 budget) is no longer proceeding. Instead, the current annual non-concessional cap of $180,000 will continue but it will be reduced to $100,000 per year. Individuals with a superannuation balance of more than $1.6m will no longer be eligible to make non-concessional contributions. These changes will apply from 1 July 2017.

The government announced in the 2016-17 budget that individuals with superannuation balances of $500,000 or less could carry forward their unused concessional contribution caps for up to 5 years. The start date of this has been deferred from 1 July 2017 to 1 July 2018.

The government announced in the 2016-17 budget that individuals aged 65-74 could make non-concessional contributions to superannuation without needing to meet the work test. This measure is not proceeding i.e. individuals aged 65-74 will need to continue to meet the work test.

If you have any questions in relation to today’s announcements, please don’t hesitate to contact us.