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In previous editions of Navy News we alerted members to upcoming changes
in superannuation laws that will take effect on July 1 2007.
We talked about changes affecting concessional (pre-tax) and non-concessional
(post-tax) contributions in previous articles. This article focuses on
transitional arrangements for the changes to contributions.
Concessional contributions – transitional
arrangements for the period 2007-08 to 2011-12
Let’s start with a recap on changes to concessional contributions.
A limit on concessional contributions of $50,000 per person per annum
will apply from 1 July 2007. These contributions will be taxed at 15 per
cent.
The $50,000 limit will increase in line with Average Weekly Ordinary Time
Earnings, $5,000 at a time.
From now until the end of the 2011-12 financial year, the cap on concessional
contributions will be $100,000 for those 50 years of age and over.
This transitional arrangement also applies to anyone who turns 50 before
the end of 2011-12.
For example, a person who turns 50 on 1 January 2011 will be able to make
$100,000 of contributions in the 2010-11 and 2011-12 financial years.
The limit will stay at $100,000 for the transitional period.
From the 2012-13 financial year, the maximum amount of concessional contributions
per annum will return to the indexed $50,000 amount.
Non-concessional contributions – transitional
arrangements for the period 10 May 2006 to 30 June 2007
Again, let’s start with a recap.
Non-concessional contributions will be limited to $150,000 per year starting
1 July 2007.
Until 30 June 2007, the cap on non-concessional contributions will be
$1 million.
This arrangement will be available to everyone eligible to contribute
to superannuation and will include any contributions already made during
that period.
Want more information? The official Government website for the super
changes is www.simplersuper.treasury.gov.au. This site is easy to understand,
with a helpful menu that includes ‘fact sheets’ and ‘frequently
asked questions’.
Another useful resource is the Australian Securities and Investment Commission’s
‘fido’ website at www.fido.gov.au.
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