Proposed changes to superannuation
Editor: Apparently in order to neutralise mounting speculation that superannuation was under threat in the upcoming Budget, the Government took the unusual step of comprehensively outlining its intentions when it comes to superannuation reform generally.
The Government has announced that it plans to make the following changes to the superannuation laws (in addition to other changes already made, such as the progressive increase in the superannuation guarantee rate from 9% to 12%):
- cap the tax exemption for earnings on superannuation assets supporting income streams (i.e., superannuation pensions) at $100,000, with a concessional tax rate of 15% applying thereafter, and apply the same treatment to defined benefit funds;
- provide a higher $35,000 concessional contributions cap to people aged 60 and over from 1 July 2013, and to individuals aged 50 and over from 1 July 2014;
- reform the treatment of concessional contributions in excess of the annual cap;
- extend the normal deeming rules (for social security purposes) to superannuation account-based income streams;
- extend concessional tax treatment to deferred lifetime annuities; and
- further reform the arrangements for lost superannuation.