2017/18 Federal Budget
The key superannuation related reform measures announced in the 2017 Federal Budget are as follows. However it is important to remember that these are only proposals at this stage that must be formally approved by Parliament before they are implemented.
- Downsizing the family home and contributing the proceeds into superannuation. The government will allow a person aged 65 or over to make a non-concessional superannuation contribution of up to $300,000 from the proceeds of selling their home from 1 July 2018. These contributions will be in addition to those currently permitted under existing rules and caps, but these sale proceeds will remain subject to the Age Pension assets test.
- First home saver scheme: voluntary contributions accessible to fund a deposit. The government will allow first home buyers to withdraw future voluntary contributions to superannuation made from 1 July 2017 for a first home deposit, along with associated deemed earnings. These withdrawals will be allowed from 1 July 2018 onwards.
- New complaints handling body for superannuation and financial services. The government will replace the Superannuation Complaints Tribunal (SCT), the Financial Ombudsman Service (FOS) and one other external dispute resolution body with the new Australian Financial Complaints Authority (AFCA) with effect from 1 July 2018.
- Medicare levy to increase. With effect from 1 July 2019 the government will increase the Medicare levy by half a percentage point from 2.0 to 2.5 per cent of taxable income. This will impact the rates at which superannuation funds must withhold Pay As You Go tax from members' benefit payments.
2016/17 Federal Budget
A number of key superannuation changes were announced in the 2016 Federal Budget, making the Budget one of the most significant for the superannuation industry in almost a decade. Below is a list of the key changes that have now been formally approved by Parliament. All of these changes apart from the catch up measures for concessional contributions commence from 1 July 2017.
- Low income tax offset retained
- Reduced $25,000 concessional contribution cap for all individuals
- Reduced annual non-concessional contribution cap of $100,000 (from $180,000) for those with a super balance of up to $1.6 million
- New $1.6 million cap for transfers to pension accounts
- New catch up measure for concessional contributions for people with super balances of $500,000 or less
- 30% concessional contribution tax for those earning over $250,000 per year
- Transition to Retirement (TTR) - tax exempt status of income from TTR pensions removed
- Extension of eligibility rules for claiming spouse tax offset.
If you would like more information on any of these changes please contact us.
Advisers who are seeking information from the Fund on behalf of a FES Super member must provide the Superannuation Board with a valid adviser authority together with certified proof of identity documentation for the member. These third party authorities will be valid for a maximum period of 12 months from the date of receipt, and may be cancelled earlier by the member by way of written notice to the Superannuation Board.
This rule applies to all third party authorities including the situation where a member wishes their spouse or partner to obtain information on their behalf, and is intended to protect the member's personal details.
If the adviser authority is no longer valid (i.e. it is more than 12 months from the date of its receipt) the Superannuation Board will require a written update to be made by the adviser or member before disclosing any details to the third party.
To help you maximise your superannuation we have provided you with a direct link to the Super Guru website that is maintained by the Association of Superannuation Funds of Australia Ltd. To access the Super Guru website click on the words "Keep your Super unified" above.
Rolling over your superannuation accounts from other funds into FES Super will make it easier for you to manage your superannuation and reduce the overall administration fees you have to pay for your super.