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Make Super change
a super opportunity

From 1 July 2017, the Federal Government is introducing a range of changes to superannuation.

These changes may have an impact on your retirement goals, so we'd like to help you understand the key changes and what they could mean for you.

Some of the key changes from 1 July 2017 include:

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Changes to contribution caps

Your plans to achieve your retirement goals may be affected by the changes if you:

  • Make before-tax (concessional) contributions greater than $25,000 per year
  • Make, or plan to make, after-tax contributions greater than $100,000 per year
  • Have a total retirement income stream with a value of more than $1,600,000
  • Have income greater than $250,000 per year and make before-tax contributions to super
  • Make contributions to your spouse’s super where their income is less than $40,000 per year

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'Transition to retirement' changes

Currently, growth and earnings from retirement products are tax-exempt. However, from 1 July transition to retirement products will have earnings taxed at up to 15%. This change may impact whether your transition to retirement strategy is still an effective option for you.

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Limits on retirement products

  • Currently, there is no limit on the amount of money you may have in a retirement income stream.
  • A new limit of $1.6 million applies on the total amount you can have in retirement income stream (on which earnings are tax-exempt) as at 1 July 2017.
  • Some of these products, including lifetime pensions, annuities and term allocated pensions, have special rules for calculating the amounts which make up your limit.

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It’s important to ensure you continue to have the right strategies in place to achieve your retirement goals. For more information on the changes, contact your financial adviser, or call us on 132 652 between 8am and 6pm (AEST/AEDT), Monday to Friday.

 

Why Super remains a super opportunity

Super continues to be a tax-effective way to help you achieve your retirement goals, even once the changes take effect on 1 July 2017.

  • Generally low rates of tax on earnings
    Earnings are taxed at the low rate of up to 15% which, for most people, is lower than their marginal tax rate. Before-tax contributions, including salary sacrifice and employer contributions are still taxed at the low rate of 15%. Depending on your income, if you make eligible contributions, you may even be entitled to additional tax benefits and Government support to make your super work even harder for you.
  • Additional tax on contributions
    Up until 30 June 2017, if your income is greater than $300,000 you would need to pay an additional 15% tax on before-tax contributions made within the limit. This income threshold will reduce to $250,000 from 1 July 2017.
  • Tax-exempt earnings from retirement products
    Once you’re 60, growth and earnings from retirement income streams are tax-exempt (if paid from a taxed fund). The exemption excludes transition to retirement pensions which will be taxed on earnings and growth at up to 15%, or 10% on eligible capital gains if the fund is eligible to apply the discount.

This communication is issued by NULIS Nominees (Australia) Limited (ABN 80 008 515 633 AFSL 236465) (NULIS). It is for general information and has not taken into account any particular person’s objectives, financial situation or needs. Before deciding to make a contribution to your superannuation, interested persons should consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. The information contained in this communication is current as at 1 July 2017. Any changes in the law or policy subsequent to this date have not been incorporated in this material.

NULIS is the Trustee of the MLC Super Fund (ABN 70 732 426 024) and the MLC Superannuation Fund (ABN 40 022 701 955). NULIS is part of the National Australia Bank (NAB) group of companies. An investment with NULIS is not a deposit or liability of, and is not guaranteed by NAB. Neither NULIS nor any other company in the NAB group of companies accepts any liability whatsoever for any decision that is made on the basis of or in reliance of the information contained in this material. NULIS is not a Registered Tax Agent and any tax information is of a general nature and should not be relied upon to determine your personal tax situation. It is recommended that you consult a professional tax adviser who is a Registered Tax Agent about your personal circumstances.