11 Sep UPDATE: Latest Government Changes to Superannuation.
Last week the Abbott Government reached a deal with the Palmer United Party (PUP) on the removal of the mining tax.
Great news on the surface at least, but not everything is as good as it appears.
Part of the deal to remove the mining tax was to freeze Super guarantee until July 1st 2021 at the current 9.5% after which point it will increase by 0.5% each year until hitting the 12% target.
In the broader context what will this mean for you?
The freeze in Super contributions will affect every Australian who earns or will earn an income in the future, while that may seem excessive it is true.
Industry Super Australia estimates the change will mean those aged 25 and on an average income will have $100,000 less in Super in retirement.
For those who are closer to retirement it is still not a positive as once again less of your income will go into your retirement savings.
Low income Super contribution scheme
Another decision last week from the government was the extension of the low income superannuation contribution scheme until 30 June 2017.
The low income super contribution initiative was created to ensure all Australian’s paid no more tax for superannuation contributions than on their marginal income. The Government rebates the 15% contribution tax paid for low income earners. To be eligible for the low income super contribution you need to earn less than $37,000 per year with the rebate being up to $500. The extension of the low income super contribution is great news for many Australians.
Learn more about Superannuation changes, SMSF investment options and the legal requirements of running your own Super at one of our SMSF Information Nights held across Australia.