Sweeping superannuation changes that will significantly impact industry and all superannuants have been announced by the Federal Government in its 2016/2017 Budget under the mantra of a new purpose for superannuation – “to provide income in retirement to substitute or supplement the Age Pension”.
Industry reaction has been swift and relatively consistent. The reforms are the most significant we have seen in terms of superannuation and tax since the co-called Simpler Super changes in 2007.
Despite the Government’s pre-election commitment to not introduce any adverse changes to superannuation in this term of Parliament, there are many who will be disappointed with the Government’s cuts to the concessional contributions cap and the introduction of a lifetime cap for non-concessional contributions.
Service providers and industry participants will be justifiably concerned with the complexity associated with measures seeking to limit retirement balances in super to $1.6 million. Coupled with other aspects of the proposed superannuation reforms, these measures will mean investors may need to look elsewhere to house their money.
It remains to be seen what impact the proposals with have on the Government’s retirement income strategy and reliance on the Age Pension. What is certain is that the reform cycle for superannuation will continue in the earnest and confidence in the system will continue to dive.
The table below (and attached by clicking download at the top of this article) provides a high level summary of the major superannuation and regulator reforms announced in the Budget. If you have any queries about how these changes impact you, please contact a member of our team.
Click here to view table.