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.