What you need to know about Government changes to super

 Recently, the Federal Government confirmed what we have expected for some time – that Australians should prepare for upcoming changes to our superannuation system.

Treasurer Scott Morrison told the media the Government was “close to a landing point” on the much-discussed changes.

“There is a strong case for examining the size and structure of the tax concessions and the treatment,” Mr Morrison told a superannuation conference in Adelaide.

“It’s clear that we are going to have to make some hard decisions when it comes to how we’re going to address the targeting of these tax concessions going forward.”

Mr Morrison said the full scope of the changes would be announced around budget time.

Some experts have criticised the current system for allowing high-income earners to minimise tax by investing large sums of money into super funds.

Currently there is a freeze on guaranteed super at 9.5 per cent. This means until 2021, the Government will not raise the percentage of your income an employer must pay to your nominated super account.

After plans for guaranteed super to rise to 12 per cent, a 9.5 per cent freeze is a blow to Australians’ retirement funds – particularly young Australians, who stand to lose as much as $100,000 from their future nest egg.

Of course, earnings on super contributions are taxed at the low rate of 15 per cent, and a freeze in guaranteed contributions would save the government and business owners money by reducing the amount of money taxed at that low rate.

For more information on changes to superannuation, head to the Industry Super website.

Another recent change to our super system relates to the age pension.

From 2017, more Australians will be able to qualify for the pension, with the assets test lowered to $250,000 and $375,000 for single and coupled homeowners respectively, and $450,000 and $575,000 for single and coupled non-home owners.

Only people with assets below those figures will be eligible for the full pension amount, while Australians with assets above these figures will be eligible for a decreased pension.

To find out what does and doesn’t count towards your assets test, go to the Industry Super website for more information.

 

First Super commissioned The New Daily to research and write this article. The views expressed are of The New Daily.

This publication was issued by First Super Pty Ltd (ABN 42 053 498 472, AFSL 223988), as Trustee of the First Super superannuation fund (ABN 56 286 625 181). It does not consider your personal circumstances and may not be relied on as financial advice. Content was accurate at the date of issue, but may subsequently change.