Changes to contribution limits passed through both houses of Parliament on Wednesday 23 November 2016, as part of the Federal Government’s superannuation reforms.
From 1 July 2017, after-tax (non-concessional) contributions will be limited to $100,000 a year for those under 65 years of age, reduced from the current $180,000 limit. Or $300,000 over a period of three years, currently $540,000. These changes are targeted at making the superannuation system more sustainable for all Australians.
It’s a considerable reduction to the after-tax contribution caps, but there’s still time to take advantage of the current legislated contribution caps and contribute up to $540,000 for the 2016/17 financial year. Known as the bring-forward rule, if you’re under the age of 65 as at 1 July, and have not utilised the bring-forward rule in the previous two financial years, you can still do so before 30 June 2017.
Your after-tax contributions are contributions you can make into your super fund once tax has been paid on them. These include:
- Personal contributions – made by you personally on which no tax deduction is claimed.
- Spouse contributions – contributions made by your spouse to your fund on your behalf.
- Excess contributions – contributions you have not elected to release from your super fund.
If you think you’re in a position to take advantage of the $540,000 after-tax cap, it’s important to seek advice to ensure it aligns with your current retirement planning strategy.
Our Financial Planner1 is available to discuss and determine if you have a need for personal advice, without any obligation. A quote will be provided for your approval to proceed. Call 1300 131 293 to find out more.
AustSafe Super is the industry super fund for rural and regional Australia, and has been committed to looking after members’ super throughout their working life, and into retirement for over 25 years.
