Budget 2009 super news
New government superannuation proposals announced in the 2009 Budget are:
Australia's Future Tax System (AFTS) Report on the retirement income system
The Australia's Future Tax System Review Panel’s key finding is that the three-pillar architecture of Australia’s retirement income system – consisting of the means tested Age Pension, compulsory saving through the superannuation guarantee and voluntary saving for retirement – should be retained.
However the panel made some recommendations which will have implications on super, including increasing the Age Pension age.
The government responded to this recommendation by announcing a move to age 67 for the Age Pension starting age.
The Panels’ final recommendations on other related issues will be released in December 2009 to enable consideration in the context of the broader tax-transfer system.
Concessional contributions cap cut to $25,000 from 2009/10
The concessional contributions cap will be reduced from $50,000 to $25,000 p.a. (indexed) from the 2009/10 financial year.
The existing transitional concessional contributions cap for those aged 50 and over (applicable for the 2009/10, 2010/11 and 2011/12 financial years) will be reduced from $100,000 to $50,000 p.a. (not indexed). From 1 July 2012, the lower cap will apply ($25,000, or applicable indexed amount) to those under 50.
There will be ‘grandfathering’ arrangements for certain members with defined benefit interests as at 12 May 2009 whose notional taxed contributions would otherwise exceed the reduced cap. This is similar to the arrangements applied when the concessional contributions cap was first introduced.
The non-concessional contributions cap is $150,000 p.a. for the 2008/09 financial year and will remain at that level in 2009.
Temporarily reducing the government super co-contribution
The matching rate and maximum co-contribution payable on eligible personal non-concessional superannuation contributions will be temporarily reduced from 1 July 2009.
Under this measure, the matching rate will be:
- 100 per cent for 2009/10, 2010/11 and 2011/12, with a maximum co-contribution of $1,000, reduced by 3.333 cents for each dollar by which the person’s total income exceeds the shade out threshold for receiving the full co-contribution
- 125 per cent for 2012/13 and 2013/14, with a maximum co-contribution of $1,250, reduced by 4.167 cents for each dollar of total income above the shade out threshold, and
- 150 per cent from 2014/15 onwards, with a maximum co-contribution of $1,500, reduced by 5 cents for each dollar of total income above the shade out threshold.
For more information on the Budget measures visit:
