News

In the 2011-12 budget there were no headline measures concerning superannuation. Most of the key measures were focused on the Governments delivery of its Stronger Super policy and a range of other ministerial superannuation statements made by the Government over the past 8 months.

Key announcements that may affect your superannuation benefits and investments are:

Contribution Caps: The Government has announced some fairly complex changes to contribution caps which are to be implemented as of the 1 July 2012. Until then the current arrangement of a $50,000 cap for all eligible individuals over 50, and $25,000 cap for all others will remain.

The changes are as follows:

The lower contribution cap will remain at $25,000 and will be indexed accordingly over the years.

The higher contribution cap has been set at a dollar difference of $25,000 above the lower contribution cap; increasing in line with the lower contribution cap. For example if the lower contribution cap does not increase from $25,000 by 1 July 2012 the higher contribution cap will be at $50,000. If in 2013 the lower contribution cap increases to $30,000 the higher contribution cap will increase to $55,000. 

The higher contribution cap will also now only be available for those over 50 with a superannuation balance less than $500,000.

Refund of excess concessional contributions: A small amount of relief will be provided to eligible individuals who make excess concessional contributions of up to $10,000 from the 2011 - 12 financial year onwards. The Government will give Fund members the option to have excess concessional contributions taken out of their superannuation fund and accessed as income at their marginal tax rate, rather than incuring excess contributions cap. There is no relief for previous years and is only for the first year a breach occurs.

Government Co-contribution: The lower and upper co-contribution thresholds will be frozen for a further 12 months. They will remain at $31,920 for the full co-contribution, and $61,920 being the limit where nil co-contribution is payable.

Superannuation pension drawdown relief: The Government will phase out the pension drawdown relief which has been provided since 2009. Minimum payments will be reduced by 25% for 2011 - 12 and will return to normal from 2012 - 13 onward. 

For more detailed information on the 2011 - 2012 Federal Budget visit http://www.budget.gov.au/2011-12/content/overview/html/overview_key_initiatives.htm