From 1 July 2009,the annual cap on concessional superannuation contributions will be reduced from $50,000 to $25,000. The transitional cap (which applies until 30 June 2012 for those aged 50 years and over) will change from $100,000 to $50,000.
Less than 2 per cent of people who make concessional contributions are expected to be affected by this measure. The aim is clearly to reduce benefits received by higher income earners who can afford to make larger concessional contributions.
Other Budget Super Changes include a reduction to the superannuation co-contribution.
Proposed changes will not become law until the Budget has been passed by the House of Representatives and the Senate, and signed by the Executive Council.
Article by Christie Lewis
Christie is Practice Manager at Alan Lewis Accountants . Besides accounting, her passion is for all things small business (and blogging, of course). You can contact Christie directly at christie@lewistaxation.com.au.
Christie has written 799 awesome articles for us at Alan Lewis Accountants – BLOG
Twitter: @christielewis
{ 4 comments… read them below or add one }
How can you publish that info on 13 May when it hadn’t been legislated? ANd still hasn’t been a month later? Just because it is in the budget doesn’t mean it will happen exactly that way, and letting people think it will could mislead them into bad decisions.
Hi Sarah,
The information is categorised and titled under Budget 2009/10 for the very reason that it was a budget announcement posted right after it was annouced. We report it as such along with every other newspaper, blog and news report in the country at that time in order to provide information for people curious about the budget announcements.
You’ll note this post is a direct release from the Government’s budget papers. I will sometimes add “depending on passage of legislation” though I seem to have omit that regarding the latest budget announcements (there was so much information to get up in a short time and it is generally understood).
It has been said in several other posts but let me reitterate here that Budget annoucements are not “law” from the moment they leave the Treasurer’s mouth and any budget changes are subject to proposals passing parliament and receiving royal assent.
I would certainly hope that anyone who would be affected by this change (a person contributing large annual amounts into their super) would seek personal, professional advice before making any major financial decisions based on internet reports of a budget announcement the very day after it was proposed.
Thanks for pointing this out though, Sarah. You’re obviously concerned and so I’ll be sure to edit our budget annoucements to make this point crystal clear to the uninformed reader.
These changes have now received royal assent.
These changes to the concessional contribution cap have received royal assent.
The annual cap on non-concessional contributions remains at $150,000 (indexed) for the 2009-10 financial year. In the future, the cap will be calculated as six times the level of the (indexed) concessional contributions cap.