In superannuation policy announcements ahead of the May 2013-14 Federal budget, then Treasurer Swan and Minister Shorten issued two joint media releases on 5 April 2013, announcing a number of important changes in the way superannuation is taxed, and other changes.
Note: A number of the policy changes set forth on 5 April 2013 have since been modified or dropped.
Higher Tax On Super Fund Earnings
(this proposal has since been scrapped by the incoming Coalition government)
It was proposed that from 1 July 2014 the earnings over $100,000 of super funds in the pension phase for each individual be taxed at 15%. On 6 November 2013 the (new Coalition) Treasurer announced that this measure is amongst a number of previous Labor government initiatives that is not to proceed. See here.
Superannuation Contribution Caps lift to $35,000
- From 1 July 2013 the concessional contributions cap will be lifted to $35,000 unindexed for people aged 60 and over (up from the current level of $25,000).
- People aged 50 and over will also be able to access the $35,000 unindexed cap from 1 July 2014
- This represents a back-down from previous government commitments to restore the cap to $50,000 for the over 50’s from 1 July 2014.
- The general (indexed) cap will converge towards the same figure and is expected to reach $35,000 by the 2018 year.
Softening of Excess Contributions Tax
- Excess contributions reforms:
- Excess concessional contributions made from 1 July 2013 can be withdrawn
- Excess contributions tax will be reduced (from the previous level of 46.5%) to the individual’s marginal rate plus interest
Pension deeming rules to be extended
- Pension deeming rules to be applied to new superannuation account-based income streams assessed under the pension income test rules after 1 January 2015. Products held by pensioners before 1 January 2015 to be grandfathered indefinitely for the life of the product.
Tax Concessions Extended To Deferred Lifetime Annuities
- From 1 July 2014 deferred lifetime annuities to receive the same concessional tax treatment that superannuation assets supporting income streams receive.
Lost Superannuation transfer thresholds to be increased
- Lost superannuation – the account balance threshold for transfer of inactive account balances to the ATO under the 5 April 2013 proposal was to be increased to $2,500 from 31 December 2015 and $3,000 from 31 December 2016 (up from $2,000 as previously announced in MYEFO 2012-13).
- As part of the previous Government’s 2013 Pre-election Economic Statement these threshold adjustments were altered to an intended $4,000 from 31 December 2015, and to $6,000 from 31 December 2016.
- Current position: On 6 November 2013 the current Federal Government announced an intention to proceed with the former government’s proposal. It is proposed that the threshold will increase from $2,000 to $4,000 on 31 December 2015 and then to $6,000 on 31 December 2016.
Council of Superannuation Custodians
- A proposal to establish a Council of Superannuation Custodians to ensure that any future changes are consistent with an agreed Charter of Superannuation Adequacy and Sustainability.
This page was last modified on 10 July 2015