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Super News


As the 2017 financial year draws to a close and planning for the 2018 financial year commences, please be aware of the changes that will apply to your concessional  (pre-tax) contribution limits.
 
A concessional, or pre-tax, contribution can be made by an employer, a self employed member of a super fund, or an employee who salary sacrifices part of their salary/wages to super.

Currently, the limit on concessional (pre-tax) contributions is $30,000 ($35,000 for people 50 years old and over) within a financial year.

From 1 July 2017, the government will lower the annual concessional contributions cap to $25,000 for all members.

If you are drawing a pension and have, or are very close to having, an account balance of $1.6 million in your fund at 30 June 2017 you need to pay attention.
 
Please note that this applies to an individual member pension account of greater than $1.6 million, rather than a fund where total net assets exceed $1.6 million.
 
From 1 July 2017 the amount of your pension assets in your fund (or funds) that exceed $1.6 million will need to be transferred back in to an accumulation account, or paid to you personally (if you meet a condition of release).
 
You will need to talk to your accountant and/or financial adviser as to what you should do from 1 July 2017. 

A reminder that on 1 January 2017, changes to Centrelink pension entitlements came in to force.

The new amount of assets above which allowances are not paid and pensions are reduced – the assets test free area – has increased to:

    $250,000 for a single homeowner
    $375,000 for a homeowner couple
    $450,000 for a single non-homeowner
    $575,000 for a non-homeowner couple

The family home is still exempt from the assets test.

Previously, for every $1,000 of assets you owned over the assets test free area, your pension was reduced by $1.50 per fortnight. This is called the taper rate.

From 1 January 2017, your pension will now reduce by $3 per fortnight for every $1,000 of assets you own over the asset free area.

For full details of the changes please consult the Centrelink website at https://www.humanservices.gov.au/customer/enablers/changes-pension-assets-test or call Centrelink to make an appointment.

The Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016 and the Superannuation (Excess Transfer Balance Tax) Imposition Bill 2016 were passed by both houses of Parliament earlier this month, finally providing some certainty for the changes that are due to commence 1 July 2017.


The changes were outlined in my October Super News update.
In your planning for the New Year, you should consider whether you will need to consult your financial planner to discuss how these changes will affect you.

 

Not only are there changes in store for superannuation legislation, as set out in my last super news update, there are also changes coming which may affect your Centrelink pension entitlements, as follows:

On 1 January 2017 the amount of assets above which allowances are not paid and pensions are reduced – the assets test free area - will increase to:

    $250,000 for a single homeowner
    $375,000 for a homeowner couple
    $450,000 for a single non-homeowner
    $575,000 for a non-homeowner couple

The family home is still exempt from the assets test.
 

Currently, for every $1,000 of assets you own over the assets test free area, your pension is reduced by $1.50 per fortnight. This is called the taper rate.

From 1 January 2017, your pension will reduce by $3 per fortnight for every $1,000 of assets you own over the asset free area.

For full details of the changes please consult the Centrelink website at https://www.humanservices.gov.au/customer/enablers/changes-pension-assets-test or call Centrelink to make an appointment.

The long awaited changes to the proposed superannuation budget reforms have been released with the majority of measures affecting the amount you can contribute to super and the tax treatment of these contributions, as well as the tax treatment of transition to retirement streams.

With 1 July 2017 as the common start date, now would be the time to consult your financial adviser about the strategies that you may wish to put in place.

Please note that your adviser will need to be properly licensed to provide you with any personal financial advice.

The reforms are set out at http://budget.gov.au/2016-17/content/glossies/tax_super/html/ with the key measures summarised below.

Please note that these measures are still subject to the passage of legislation.  

There is nothing to report this month in terms of the budget updates as everything is still on the table.
 
In other news the ATO has stated that it will be looking more closely and providing further guidance on the exempt current pension income claim of funds that have segregated assets or are moving in to pension mode.

One important aspect of this is that members continue to withdraw the full amount of the minimum pension benefit which is generally advised by the accountant each year.

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JCMB Consulting Pty Ltd
PO Box 480, Inverloch, VIC 3996


 
ABN 86 768 265 615
Michele Beattie – Principal


C.A., B. Commerce (Melb), Approved SMSF Auditor / SMSF AUDITOR NUMBER - 100 087 330


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