URGENT – Possible changes to super contribution rules
As you may have read in the daily press in recent days, it is anticipated that the Federal Government will introduce changes to superannuation contribution rules in the Budget to be delivered next Tuesday, 12 May 2009.
The anticipated changes vary from industry expert to industry expert as does the timing of effect of the changes. However, the major changes could include;
- Reduction in the limit of tax deductible contributions by people under the age of 50 from $50,000 pa to $25,000 pa.
- Reduction in the limit of tax deductible contributions by people over the age of 50 from $100,000 pa to $50,000 pa.
- Scaling back of the level of non-tax deductible contribution limits for those under 65 from $150,000 pa (or $450,000 every 3 years).
- Limitations on the level of deductible super contributions by those that are currently drawing Transition to Retirement Pensions (commonly known as TRAPs)
The last round of major changes affecting superannuation was announced on Budget night in May 2007 and took effect from 1 July 2007. The result of the lag was that taxpayers were able to pour millions of dollars into superannuation, both deductible and non-deductible, before the new changes had effect. Bearing this in mind and to prevent a repeat of the events of 2007, it is possible that the Government may declare that the changes muted take effect from Budget night, Tuesday 12 May 2009.
Those taxpayers who were/are planning on making maximum deductible or non-deductible contributions to superannuation before 30 June 2009 should now give serious consideration to making these contributions before next Tuesday 12 May 2009.
If you have any questions or concerns or require our assistance in relation to the above, please contact your Client Partner or Manager as soon as possible on 9854-3200.