While there were only two significant changes announced in last weeks’ Federal Budget, there is still time to take advantage of changes that were delivered last year.
With many members and professionals still grappling with the super reforms coming into effect from 1 July 2017, the industry was not expecting any further major announcements, however it is still vital that you understand the two key announcements:
First home savers super scheme
- This widely reported proposal aims to assist first home buyers saving for their deposit.
- From 1 July 2017, members will be able to make voluntary concessional and non-concessional contributions to super restricted to $15,000 p.a. and $30,000 in total.
- These contributions will count towards the member’s relevant contribution cap.
- Withdrawals of these amounts plus associated earnings can be made from 1 July 2018.
- This is considered by many to be a welcome compromise by the government, as it is designed not to reduce existing savings within superannuation.
Non-concessional contributions for members 65+
- This proposal would allow members over 65 years of age, who are downsizing their home, to be eligible to contribute up to $300,000 each of non-concessional contributions to super.
- The principal place of residence being sold must have been held for the past 10 years or more.
- This will permit a couple who are eligible to contribute up to $600,000 of non-concessional contributions to super.
- These members will not have to meet the work test, and can be made if the member has more than $1.6M in super and the contributions do not count towards individual’s non-concessional cap in the year of contribution.
What to do now
While superannuation changes in the Federal budget were minimal, we still encourage all members to seek advice in relation to the super reforms coming into effect from 1 July 2017. With limited time to 30 June, members need to ensure that last opportunity strategies are utilised or reviewed in relation to contributions and structuring. You are in a unique position to help your clients make the most of the opportunities now before limits and rules are changed from 1 July 2017!
Contact your Partners Wealth Group specialist now on 1800 333 143, to discuss how we can help.