|
Government Superannuation Policy Measures |
 |
 |
Although some of these have been legislated, there are a number of measures yet to be actioned. The following is a brief update on the status of these measures.
Legislated Measures:
- Contribution age increase ? From 1st July 2002, personal contributions can be made to superannuation funds by people who are over age 70 but less than 75, provided they are employed on at least a part time basis (minimum 10 hours each week). This will allow working people aged between 70 and 75 to continue contributing to super and, upon retirement to purchase a tax-effective income stream (such as an Allocated Pension). To complement the contribution age increase, the compulsory cashing restrictions have also been amended so that members who remain employed for at least 10 hours each week can leave their benefits in super up until age 75.
- Deduction limit increased ? From 1st July 2002, the tax deduction available to self?employed, substantially self-employed and unsupported persons has increased from the first $3,000 to the first $5,000 of super contributions plus 75% of the balance up to their age based limit. This effectively increases the maximum tax deduction each year by $500.
- Contributions for children ? From 1st July 2002, the superannuation contribution rules have been extended to allow contributions to be made by parents, grandparents or relatives on behalf of a child under age 18. The contributions made on behalf of the child are limited to a maximum amount of $3,000 over a three-year period. However, many funds will not accept contributions for persons under age 18.
- First Child Tax Refund ?Baby Bonus? ? From 1st July 2002, people who receive the baby bonus will be able to contribute to superannuation regardless of their work status. The contribution must be made within one year of notification from the ATO.
- Quarterly SG contributions ? From 1st July 2003, employers will be required to make Superannuation Guarantee contributions quarterly rather than annually, in order to avoid paying the SG charge.
Note: From 1st July 2002, the minimum level of superannuation support that an employer is required to make under the Superannuation Guarantee scheme increased from 8% to 9% of an employee?s salary or wages.
Still to be legislated:
The superannuation measures that have not yet been legislated include:
- Ability to split super contributions ? Although this is scheduled to commence from 1st July 2003, the Government has not confirmed how this measure will work in practice. It is broadly proposed however, that couples will be able to split both their personal and employer superannuation contributions and have them paid into a separate superannuation account in their spouse?s name.
- Reduction in super surcharge ? The Government has proposed that the super surcharge rate will be reduced by one tenth of current levels over each of the next three years. In other words, the maximum surcharge rate of 15% will reduce to 13.5% for 2002/03, 12% for 2003/04 and 10.5% for 2004/05. Although this measure is due to commence from 1st July 2002, the Opposition parties have indicated that they will not support this measure.
- Low-income co-contribution scheme ? The Government has proposed to pay a co-contribution that will match (dollar for dollar) personal super contributions of up to $1,000 each year for low-income earners. This measure is currently before Parliament and (with expected Opposition support) should be introduced for the 2002/03 financial year.
- Fund Choice ? The Government has reintroduced its superannuation fund choice proposal into Parliament. Generally, under this arrangement, employees will be given the ability to instruct their employers to make Superannuation Guarantee contributions to the fund of their choice. This proposal is scheduled to commence from 1st July 2004, however to date the Opposition parties have opposed this measure.
|
+ 61 8 8333 1944
Join Us