Changes To Super You Need To Know

Several important changes to super were announced by the Government, but not all have been legislated as yet.

The Superannuation Guarantee(SG) rate will progressively increase from 1 July 2013. The current SG rate of 9% will continue to apply in 2012/13, increase to 9.25% in 2013/14 and rise progressively to 12% by 2019/20.

The SG age limit of 70 will be removed from 1 July 2013, and employers will be required to contribute to complying super funds of eligible employees aged 70 and older (this has been legislated).

Low income Superannuation Contribution

From 1 July 2012, the Low Income Superannuation Contribution will effectively refund up to $500 of contributions tax to people who earn up to $37,000 in adjusted taxable income.

Change to contributions cap

The Government has legislated that from 1 July 2012, the concessional contributions cap in 2012/13 and 2013/14 for all individuals is $25,000. The Government has also proposed that from 1 July 2014, individuals aged 50 years or older, with super balances below $500,000 may be able to make $25,000 additional concessional contributions over and above the general $25,000 concessional contributions cap.

Increased contributions tax for very high income earners

The Government has proposed that from 1 July 2012, individuals with incomes greater than $300,000 may have certain concessional contributions taxed at 30% (increased from 15%).

The higher rate will not apply to concessional contributions exceeding the concessional contributions cap. These are already subject to the ‘excess contributions tax’ rate.

Reduction to government co-contribution amounts

Further reductions to the co-contribution scheme have been proposed from 1 July 2012. The maximum co-contribution is to reduce from $1,000 to $500, the co-contribution rate is to reduce from $1.00 to $0.50 and the higher income threshold is to decrease from $61,920 to $46,920.


Comments are closed.


Liability limited by a scheme approved under Professional Standards Legislation.

The information contained in this site is general and is not intended to serve as advice. No warranty is given in relation to the accuracy or reliability of any information. Users should not act or fail to act on the basis of information contained herein.

© MJC & Co. Accountants.