Immediate Changes on Superannuation – Federal Budget Analysis 2016

May 5, 2016 by Edge Financial Planning

Treasurer Scott Morrison has handed down his first Federal Budget – the Coalition Government’s third. The winners are low and middle income earners, unemployed youth and small business, and there are significant changes to superannuation.

Note: These changes are proposals only and may or may not be made law.


1. A lifetime cap on non-concessional (after-tax) superannuation contributions of $500,000 will apply from 7.30pm on 3 May 2016.

2. The income tax threshold at which the 37% tax applies will increase to $87,000 pa on 1 July 2016, from the current $80,000 pa.

3. The tax rate that applies to small business companies will reduce to 27.5% for businesses with a turnover up to $10 million in 2016/17. Further tax concessions will apply in future financial years.

A range of superannuation measures will also apply from 1 July 2017.

– The annual cap on concessional (pre-tax) super contributions will reduce to $25,000, regardless of age.

– Concessional super contributions may exceed the annual cap if certain conditions are met.

– Those aged between 65 and 74 will be able to make super contributions regardless of whether they work or not.

– Tax deductions will be able to be claimed for personal contributions regardless of employment status.

– A lifetime limit of $1.6m will be placed on the amount of superannuation that can be transferred to start pensions.

– Earnings on investments held in ‘transition to retirement’ pensions will be taxed at 15% (currently 0%).

If you have any questions or concerns about how this may affect you, Contact us here

Peter Hogan (Senior Technical Manager, MLC) examines and addresses key areas in this video.

Find a more detailed explanation to the Federal Budget Analysis here.

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Important information and disclaimer

This publication has been prepared by Leigh Stafford, Penny Collicoat, Little Miss Stonnington Pty Ltd (trading as Edge FP) Authorised Representative(s) of Apogee Financial Planning Limited ABN 28 056 426 932, an Australian Financial Services Licensee (“Licensee”), Registered office at 105 –153 Miller St North Sydney NSW 2060 and a member of the National Australia Bank Limited group of companies (“NAB Group”). Any advice in this publication is of a general nature only and has not been tailored to your personal circumstances. Accordingly, reliance should not be placed on the information contained in this document as the basis for making any financial investment, insurance or other decision. Please seek personal advice prior to acting on this information. Information in this publication is accurate as at the date of writing (July 2015). In some cases the information has been provided to us by third parties. While it is believed the information is accurate and reliable, the accuracy of that information is not guaranteed in any way. Opinions constitute our judgement at the time of issue and are subject to change. Neither the Licensee nor any member of the NAB Group, nor their employees or directors give any warranty of accuracy, not accept any responsibility for errors or omissions in this document. Case studies in this publication are for illustration purposes only. The investment returns shown in any case studies in this publication are hypothetical examples only and  do not reflect the historical or future returns of any specific financial products. Any general tax information provided in this publication is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent. If any financial products are referred to in this publication, you should consider the relevant Product Disclosure Statement or other disclosure material before making an investment decision in relation to that financial product. Past performance is not a reliable guide to future returns as future returns may differ from and be more or less volatile than past returns.