Many people in the super industry approach each budget with some trepidation given the number of changes to the superannuation system over the years. This year, however, the industry received a pleasant surprise with only two changes, one being the ability to withdraw excess non-concessional contributions and the second being changes to the increases to the super guarantee rate.
Under the proposed changes to the excess non-concessional contributions regime (see Media Release: Superannuation Excess Contributions Tax), which are to apply from 1 July 2013, “if an individual chooses this option, no excess contributions tax will be payable and any related earnings will be taxed at the individual’s marginal tax rate”. It therefore appears as though these changes will be very similar to the new excess concessional contribution regime. This is a welcome change that will, in effect, mean the end of excess contribution assessments unless a member chooses to keep their excess contributions in their super fund.
Under the proposed changes to super guarantee, the super guarantee rate will increase from 9.25 per cent to 9.5 per cent from 1 July 2014 as currently legislated. The rate will remain at 9.5 per cent until 30 June 2018 and then increase by 0.5 percentage points each year until it reaches 12 per cent.
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