Changes to superannuation

The schedule for increasing the superannuation guarantee has been amended.

Changes to superannuation

Superannuation continues to be a hot topic, with changes promised and then not delivered. In the Federal Budget 2014, the schedule for increasing the superannuation guarantee and excess contributions tax has been amended

Superannuation guarantee changes
The Employer’s Superannuation Guarantee will rise to 12 per cent but the timeframe for doing so will be amended.

The rate, which was announced to remain at 9.25 per cent, will now increase to 9.5 per cent from 1 July 2014, but will remain at this level until 30 June 2018. It will then increase by 0.5 per cent each year until it reaches its optimum level of 12 per cent in the 2022-23 financial year.

The change is necessary as Senate would not pass the Government’s election commitment to defer the increase scheduled for 1 July 2014.

Superannuation excess contributions tax
Superannuation contributions which exceed the non-concessional limits are currently taxed at the top marginal tax rate and, given that such earnings have already been taxed at the marginal rate, this can amount to 93 per cent tax.

Any excess contributions made from 1 July 2013 which breach the non-concessional cap can be withdrawn from superannuation, along with any associated earnings, without incurring a penalty. If excess contributions remain, these will continue to be taxed at the top marginal rate.





    COMMENTS

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    Blossom
    14th May 2014
    11:43pm
    Re the Superannuation I am referring to younger men paying Child Support. If they now pay extra into salary sacrifice to lower taxation and withdraw some, does that mean that they get away with paying as much child support ????


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