New Government changes to super

16 December 2011

The 11 May 2011 Federal Budget saw the announcement of a range of super initiatives. The following new announcements made on 30 November 2011 by the Government will be of interest to members.  Please be aware the below proposals are not yet law. For further information on the Government's Budget proposals visit www.budget.gov.au.
 

Reduced Government co-contributions

From 1 July 2012 the maximum Government payment and matching rate for voluntary member superannuation contributions is to be reduced by 50%.  This means that for eligible workers earning up to $31,920 pa, the maximum Government co-contribution will be $500 (instead of the current $1000).

Eligible workers contributing to super after tax, and earning over $31,920 and up to $46,920 pa, will also receive a reduced co-contribution.  The date that the reduced co-contribution is intended to take effect, 1 July 2012, is also the date the Low Income Super Contribution commences. 
 

Pausing of superannuation contribution caps

The Government has announced that it intends to continue the current $25,000 limit on concessional contributions for those under 50 years until the 2013/14 financial year.  It was expected the cap would rise next year due to indexation.

Concessional contributions caps for those under 50 years are not expected to be indexed until 2014/15, when it is predicted they will increase to $30,000. No further changes have been announced for concessional contribution caps for those aged 50 or over with less than $500,000 in their super account.

Below is a table of the current concessional contributions limits, as well as the proposed concessional contributions from the 2012/13 year.

 

Minimum pension payment changes extended to 2012/13 year

The Government will further extend its 2011/12 pension drawdown relief, where allocated pension members are required to withdraw at least 75% of the legislated minimum pension payments, to 2012/13.