SUPERCentral News - Issue 142 May 2016 - BUDGET EDITION

Last week was so long ago
It was only a week ago that that the Government announced the most significant changes to Superannuation in the past 10 years. 

The Big Picture – ScoMo up front and close
There are two changes which implement the Government’s objective: namely the new contribution caps and the pension transfer cap. 

Who are the most affected by the lifetime cap?
Any individual who has made non-concessional contributions since 1 July 2007

Who is immediately affected by the pension transfer cap?
Any individual who on 1 July 2017 has a pension balance (or an aggregate balance) in excess of $1.6m will be affected. 

What about transition to retirement pensions?
The proposed changes mean that from 1 July 2017, transition to retirement pensions will no longer be entitled to the earnings tax exemption. 

Is this the end of super as we know it?
No, but Super will change.  The age of mega account balances is closed to new entrants...

Should we panic now or next week?  Should we go to Panama or Rio?
Assuming the changes as announced are implemented – they apply on and from 1 July 2017...

Will the changes change the focus of super planning?
Yes.  Going forward super planning will be about 3 things; first the transfer of value into the super system...

What remains of Super?  Qui Vadis Svper?
What remains is that super continues to be one of the most tax preferred investments available in Australia. 

The details of the proposed changes
The ScoMo super package consists of 12 significant changes with most of the changes applying from 1 July 2017.

Bacon Super & Eggs Budget Seminar and Webinar  
Our next breakfast seminar will be on Friday, 27 May 2016 at the Sydney Hilton and will be all about the Budget.