An update on the super changes


The Federal Government's super changes have now passed through Parliament. Most of these changes will come in on 1 July 2017.

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Here's an overview of the Government's super changes. Most come into effect from 1 July 2017.

The work test
The work test still applies for people aged between 65 and 74. This means if you’re between these ages and you want to add to your super, you’ll need to work 40 hours within a 30 day period each financial year.

Personal payments to super
From 1 July 2017, anyone under 75 can claim a tax deduction for personal payments they make to super up to $25,000. If you’re between 65 and 74, you’ll need to meet the work test.

The $25,000 limit also includes employer and salary sacrifice contributions. A 15% contributions tax will apply.

After-tax payments to super
From 1 July 2017, the most you can add to your super from your after-tax pay every year will be $100,000 instead of the current $180,000. You can still add $180,000 for the financial year to 30 June 2017.


If you’re under 65, you can bring forward three years’ worth of after-tax contributions, which means you can contribute up to $300,000 over a three year period until your balance reaches $1.6 million. 


Depending on your level of after-tax contributions in the last three years, you may still be able to contribute up to $540,000 before 30 June 2017. There are transitional arrangements for people who have triggered the bring-forward rule but haven’t reached the full cap.

New $1.6 million super balance threshold
If your total super balance is over $1.6 million you won’t be able to make any further after tax contributions to super from 1 July 2017. Money you have in your retirement income account is also counted towards this threshold.

Lifetime cap on transfers to retirement income accounts
From 1 July 2017, a cap of $1.6 million applies to how much super you can transfer into retirement income accounts over your lifetime.


If you have more than $1.6 million in your income account on 1 July 2017, you’ll need to transfer the excess into a super (accumulation) account where you’ll pay 15% tax on earnings, or withdraw it as a lump sum.

Changes to Government Age Pension
Last year the Government announced changes to the assets test for the Age Pension, which will be introduced on 1 January 2017. The limits to how much income you can earn and qualify for the Age Pension haven’t changed. The income and assets test rules work together and can be complex, so it can help to speak to a financial adviser.

For more information on how these changes might impact you visit our asset changes page.

Next steps

We want you to feel confident about your retirement, so we’ve provided some steps to help you prepare ahead:


1
Many people use the income from their super to top up their Age Pension payments. If you need help, call us on 1300 300 273 and we can put you in touch with a financial adviser*.
2
We run regular seminars that can help you make the most out of your retirement income. Find a seminar near you
3
You can find out more about your Age Pension eligibility or make an appointment to speak to a Financial Information Services Officer about your Centrelink benefits at humanservices.gov.au/Centrelink
4
You can find out more about these changes at treasury.gov.au.
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Still working but retirement’s getting closer?

Here's an overview of the Government's super changes. Most come into effect from 1 July 2017.

Support for low income earners
If you earn less than $37,000 a year, you currently receive a Low Income Super Contribution of up to $500 to offset the 15% tax you pay on your super contributions. From 1 July 2017, this will become the Low Income Super Tax Offset and will stay at a maximum of $500 a year.

Spouse contributions
From 1 July 2017, you could be eligible for a low income spouse offset if you make contributions to your spouse’s super. They'll need to earn less than $40,000 a year and be under 70 years old. The offset is capped at $540 a year and your spouse must meet the work test if they're between 65 and 69.

Before-tax payments to super
From 1 July 2017, the most you can pay into super from your before-tax pay (including employer contributions) at the 15% tax rate will be $25,000 a year. If you’re between 65 and 74, you’ll need to meet the work test.

Before 30 June 2017, you can add up to $35,000 to super from your before-tax pay and only pay 15% tax if you’re over 50. If you’re under 50, you can add $30,000 this way.


If you have less than $500,000 in super, you can make catch-up payments if you haven’t reached your $25,000 a year limit during a rolling five year period. This change takes effect from 1 July 2018.

From 1 July 2017, a 30% tax rate will apply to before-tax payments for higher income earners. This applies if your income plus before-tax payments (including employer contributions) reach $250,000 (previously this was $300,000).

Transition to retirement
You can still use a transition to retirement (TTR) to work less or save more, but some of the tax benefits are changing. 


From 1 July 2017, investment earnings on assets in your TTR income account will be taxed at 15% until you retire.

TTRs are still useful for people who want to reduce the hours they work but maintain the same take-home pay.

After-tax payments to super
From 1 July 2017, the most you can add to your super from your after-tax pay every year will be $100,000 instead of the current $180,000. You can still add $180,000 for the financial year to 30 June 2017.


If you’re under 65, you can bring forward three years’ worth of after-tax contributions, which means you can contribute up to $300,000 over a three-year period until your balance reaches $1.6 million.


Depending on your level of after-tax contributions in the last three years, you may still be able to contribute up to $540,000 before 30 June 2017. There are transitional arrangements for people who have triggered the bring-forward rule but haven’t reached the full cap.

$1.6 million super balance threshold
If your total super balance is over $1.6 million you won’t be able to make any further after tax contributions to super from 1 July 2017. Money you have in your retirement income account is also counted towards this threshold.

Personal payments to super
From 1 July 2017, anyone under 75 can claim a tax deduction for personal payments they make to super up to $25,000. If you’re between 65 and 74 you’ll need to meet the work test.


The $25,000 limit also includes employer and salary sacrifice contributions. A 15% contributions tax will apply.

Lifetime cap on transfers to retirement income accounts

From 1 July 2017, a cap of $1.6 million applies to how much super you can transfer into retirement income accounts over your lifetime. 


If you have more than $1.6 million in your retirement income account on 1 July 2017 you’ll  need to transfer the excess into a super (accumulation) account where you’ll pay 15% tax on earnings, or withdraw it as a lump sum.

Next steps

We want you to feel confident about your future as superannuation is a great way to save for your retirement, so we’ve provided some steps to help you prepare ahead:


1
You can still use a TTR to work less or save more. You should speak to a financial adviser before 1 July 2017 to find out if this is right for you. Call us on 1300 300 273 if you would like us to put you in touch with a financial adviser*
2
We run regular seminars that can help you prepare for retirement. Find a seminar near you.
3
Call us on 1300 300 273 and we can put you in touch with a financial adviser*.
4
You can find out more about these changes at treasury.gov.au.
Back to top

Working and saving for your future?

Here's an overview of the Government's super changes. Most come into effect from 1 July 2017.

Support for low income earners
If you earn less than $37,000 a year, you currently receive a Low Income Super Contribution of up to $500 to offset the 15% tax you pay on your super contributions. From 1 July 2017, this will become the Low Income Super Tax Offset and will stay at a maximum of $500 a year.

Spouse contributions
From 1 July 2017, you could be eligible for a low income spouse offset if you make contributions to your spouse’s super. They'll need to earn less than $40,000 a year and be under 70 years old. The offset is capped at $540 a year and your spouse must meet the work test if they're between 65 and 69.

Before-tax payments to super
From 1 July 2017, the most you can pay into super from your before-tax pay (including employer contributions) at the 15% tax rate will be $25,000 a year. This will be the same for everyone regardless of age.


Before 30 June 2017, you can add up to $30,000 to super from your before-tax pay and only pay 15% tax if you’re under 50. If you’re over 50, you can add $35,000 this way. 


If you have less than $500,000 in super, you can make catch-up payments if you haven’t reached your $25,000 a year limit during a rolling five year period. This change will come into effect from 1 July 2018. 


From 1 July 2017, a 30% tax rate will apply to before-tax payments for higher income earners. This applies if your income plus before-tax payments (including employer contributions) reach $250,000 (previously this was $300,000).

After-tax payments to super
From 1 July 2017, the most you can add to your super from your after-tax pay every year will be $100,000 instead of the current $180,000. You can still add $180,000 for the financial year to 30 June 2017.


If you’re under 65, you can bring forward three years’ worth of after-tax contributions, which means you can contribute up to $300,000 over a three year period until your balance reaches $1.6 million. 


Depending on your level of after-tax contributions in the last three years, you may still be able to contribute up to $540,000 before 30 June 2017. Transitional arrangements for people who have triggered the bring-forward rule but haven’t reached the full cap.

New $1.6 million balance super balance threshold
If your total super balance is over $1.6 million you won’t be able to make any further after tax contributions to super from 1 July 2017. Money you have in your retirement income account is also counted towards this threshold.

Personal payments to super
From 1 July 2017, anyone under 75 can claim a tax deduction for personal payments they make to super up to $25,000. If you’re between 65 and 74 you’ll need to meet the work test.

The $25,000 limit also includes employer and salary sacrifice contributions. A 15% contributions tax will apply.

Lifetime cap on transfers to retirement income accounts

From 1 July 2017 a cap of $1.6 million applies to how much super you can transfer into retirement income accounts over your lifetime. The income and earnings on your account will continue to be tax free.


Next steps

We want you to feel confident about your future, so we’ve provided some steps to help you prepare ahead:

1
Super is a great way to save for your future, and planning ahead can make all the difference. If you need help, call us on 1300 300 273 and we can put you in touch with a financial adviser*.
2
You can find out more about these changes at treasury.gov.au.
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* The financial advice you receive will be provided under the Australian Financial Services licence held by a third party and not by AustralianSuper Pty Ltd (AustralianSuper) and therefore is not the responsibility of AustralianSuper. Some personal advice provided may attract a fee, which would be outlined before any work is completed and is subject to your agreement. With your approval, the fee for advice relating to your AustralianSuper account(s) can be deducted from your AustralianSuper account.