Proposed changes to super from 1 July 2007
Please note that Parliament has now passed laws that will limit how much you can contribute to super after 1 July 2007. If you're planning large contributions, you may need to read more about the incoming rules.
Here we give a basic summary of the changes, so you can see if they're likely to affect your retirement or your contribution plans. We also explain how they will affect some of our calculators and our super and retirement information.
The Treasury website simplersuper.treasury.gov.au has much more information. You may also need personal advice from a licensed financial adviser.
Retirement and your super
Superannuation benefits paid from a taxed fund, either as a lump sum or as an income stream such as a pension, will be tax free for people aged 60 and over.
Benefits paid from an untaxed scheme (mainly affecting public servants) will still be taxed, although at a lower rate than they are now for people aged 60 and over.
If, under the law, you are presently allowed to retire and access your super before age 60, your right to do so will not change, but you will be taxed on your benefits under new simplified rules.
From 20 September 2007 the pension 'assets test' taper rate will be halved to $1.50 per fortnight for every $1,000 of assets above the assets test free area. (This means you may be able to have more in assets and still be entitled to a full or part age pension.)
Reasonable Benefit Limits (RBLs) will be abolished.
You will have greater flexibility as to how and when to draw down your superannuation in retirement. Super funds will no longer be forced to pay benefits.
You will be able to make deductible super contributions up to age 75, but limits apply to how much you can contribute