The changes to superannuation announced in the 2006 federal budget have been legislation and commenced on 1 July 2007. Some of the opportunities and changes to superannuation are summarised below:
Superannuation Opportunities
- Taxpayers who are 60 and over can convert taxable salary into a tax free pension payment from their superannuation funds;
- Taxpayers who are over 60 and retired or over 65 and still working can access tax free lump sum payments from their superannuation funds;
- Taxpayers who are 55 and over can commence a transition to retirement pension and access a 15% tax offset;
- All assets invested in pension phase in a superannuation fund will generate tax free income and tax free capital gains in the superannuation fund.
New Contribution Limits from 1 July 2007
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Contribution Type
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Treatment before 30 June 2007
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Treatment from 1 July 2007
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Undeducted Contributions (these are made voluntarily by taxpayers out of after tax income)
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Limited to $1 million for people under 75 eligible to contribute to super
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Limited to $150,000 per year or $450,000 averaged over 3 years for people under 65
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Employer Contributions for people aged 50 and over (these are made by employers out of pre tax income)
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Deduction is limited to $105,113
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Limited to $100,000 per year until 30 June 2012
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Employer Contributions for people under 50 (these are made by employers out of pre tax income)
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Deduction is limited to $42,384 for people aged 35 to 49 and $15,260 for people under 35
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Limited to $50,000 per year
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Self Employed / eligible person contributions (these are made by eligible self employed people out of pre tax income)
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First $5,000 is deductible and then 75% of the amount over $5,000 limited to a maximum deduction equal to the age based limits above
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Same as limits above for employer contributions.
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