The Federal treasurer announced 3 key changes to the superannuation policies that were anounced on Federal Budget night.
These include :
1. scrapping controversial plans for a lifetime cap of $500,000 on non-concessional contributions.
2. Removing the measure to extend the eligibility to contribute through to age 74
3. Deferring until 1 July 2018 (by 1 year), the commencement of the 5 year rolling concessional contribution caps for individuals with superannuation balances of less than $500 000.
It is now expected that this legislation will be introduced by the end of the year.
This move is in line with extensive speculation that the reforms (particularly the $500 000 Non Concessional contribution lifetime cap), would be on the chopping block, given the reported backlash to the cap from within the Liberal Party as well as opposition from the party faithful.
To date, the proposal had already been significantly modified, with exemptions for personal injury payouts and for those with LRBAs under way before budget night.
According to Fairfax Media, the cap has been replaced with a mechanism in which people would be able to make both concessional and non-concessional contributions until the cap of $1.6 million in a super retirement account is reached.
There would also be a yearly cap of $100,000 on non-concessional contributions until the $1.6 million is reached.
(Extracted from SMSFAdviser 15th September 2016)
This measure effectively keeps the " Work Test" requirements for individuals who want to make a contribution between 65 and 74 years of age.
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