Superannuation was relatively left alone in the Federal budget, with essentially the two main changes being proposed. The minimal changes to superannuation was expected, due to many people still grappling with the super reforms coming into effect from 1 July 2017, because of last year’s budget.
To summarise the two main changes proposed, first we will look at the first home savers super scheme. The proposal is to assist first home buyers saving for their deposit. From 1 July 2017, you will be able to make voluntary concessional and non-concessional contributions to super restricted to $15,000 p.a. and $30,000 in total. These contributions will count towards your relevant contribution cap. Withdrawals of these amounts plus associated earnings can be made from 1 July 2018.
For many, this proposal is a welcome compromise by the government, as it is designed not to reduce existing savings within superannuation.
The other main change is to allow those over 65 years of age, who are downsizing their home, to be eligible to contribute up to $300,000 each of non-concessional contributions to super, provided that the principal place of residence being sold has been held for the past 10 years or more. This will allow an eligible couple to contribute up to $600,000 of non-concessional contributions to super. These couples will not have to meet the work test and can be made if their respective total super balances exceed $1.6M each. This contributions will not count towards the couple’s non-concessional cap in the year of contribution.
Even though the changes to superannuation in the Federal budget were minimal, we are encouraging everyone to seek advice in relation to the super reforms coming into effect from 1 July 2017. With limited time left until 30 June, you will want to ensure that last opportunity strategies are utilised or reviewed in relation to contributions and structuring. Make the most of the opportunities now before limits and rules are changed from 1 July 2017!
Please contact your Bentleys Wealth Advisor on 02 9220 0700, to discuss how we can help.