In addition to the announcements made in response to the Henry Review, the superannuation related changes announced in the Budget included the following.
Co-contribution matching rate reduced permanently to 100%
The Government has announced that it will permanently set the matching rate for the superannuation co-contribution at 100% and the maximum co-contribution that is payable in respect of an individual's eligible personal non-concessional superannuation contributions at $1,000. This means that previously legislated increases in the matching rate to 125% for 2012-13 and 2013-14 (and 150% for later income years) will not proceed should this measure be enacted. Furthermore, there will be a freezing for 2010-11 and 2011-12 of the indexation applied on the income threshold above which the maximum superannuation co-contribution begins to phase down. This means that the matching contribution of up to $1,000 for individuals with incomes of up to $31,920 in 2009-10 (phasing down for incomes up to $61,920) will have their thresholds frozen at the current levels for 2 years.
Other amendments proposed
Several other measures affecting superannuation were also announced including:
- minor amendments relating to excess contributions tax, and time limit for deductions;
- extending the range of benefits that are deductible by complying superannuation funds and retirement savings account providers to include terminal medical condition benefits; and
- providing CGT rollover for transfers by the proposed Commonwealth Superannuation Corporation of assets from the Military Superannuation Benefit Scheme to the Australian Reward Investment Alliance Investment Trust.