The federal government has released for consultation the first tranche of super changes announced in the 2016 federal budget. Absent from the first tranche are the more controversial proposals relating to proposed changes to the contributions caps and the $1.6 million pension cap. The first tranche contains proposed legislative changes to introduce the following measures:
- The removal of the “10% test” for personal deductible contributions – this is a welcome change that will allow all persons to make personal deductible contributions;
- The removal of the “work test” for members aged between 65 and 75 – this is another welcome change that will allow persons to make contributions up to the age of 75 regardless of whether they have retired or not;
- Increasing the spouse income threshold for eligibility to receive a tax offset for spouse contributions from $13,800 to $40,000;
- Introduction of a low income superannuation tax offset for low income earners to effectively reduce the contributions tax for such persons to nil;
- Introducing legislation which sets out the primary objective of the superannuation system.
The above measures, if passed by parliament, are proposed to commence from 1 July 2017.
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