News Update: $ 500K Lifetime Cap Scrapped
As predicted in issue 3 of our SMSF Platinum Series, the first casualty of the government’s super reforms is the $500K lifetime cap on non-concessional contributions.
In a compromise, the $500,000 cap backdated to 2007 has been removed and replaced by 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 was reached. There will be an annual limit of $100,000 on non-concessional contributions, down from the current $180,000 cap, until the $1.6 million is reached.
People aged under 65 can continue to bring forward three years’ worth of non-concessional contributions in recognition that such contributions are often made as lump sums.
To balance the cost, the government has scrapped a proposal to remove restrictions such as minimum work requirements on people aged between 65 and 74 wishing to make voluntary contributions to their super.
The government has also delayed by a year – from July 1, 2017 to July 1, 2018 – plans to allow people with interrupted work patterns to roll over unused concessional contributions from the previous year.
Lets’ see how they go in the senate?
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