Mid-year budget cuts

Hell-bent on getting the balance sheet back in the black, Treasurer Wayne Swan has delivered his Mid-Year Economic and Fiscal Outlook (MYEFO). If you’re trying to boost your superannuation balance, the news isn’t great.

Reduction of the super co-contribution

The super co-contribution will remain at a 100 per cent for this fiscal year, so if you contribute $1,000 to your super after tax, the Government will match this and also deposit $1,000 in to your super fund. There is an upper cut-out limit of $61,920 and if you earn more than this, you will receive no co-contribution.

In the fiscal year 2012/13 when the Government had initially planned to start increasing the level of co-contribution paid, this will now be reduced to a 50 per cent co-contribution to a maximum of $500.  The cut-out limit will also be reduced to $46,920.

Dependent spouse tax offset age reduction

From 1 July 2012, the offset will only apply to an eligible spouse born on or after 1 July 1952.

Ms Louise Biti, Director, Strategy Steps commented “it is disappointing that the cut-out to be eligible for the co-contribution has bee reduced to adjustable taxable income of $46,920 and the co-contribution matching rate will be reduced from 100 per cent to 50 per cent with a maximum contribution of $500”.

For more information, visit Strategysteps.com.au

Are these cuts necessary or has Treasurer Swan overlooked the need for fifty-something Australians to drastically boost their super balances?