Superannuation Alert – 2016 Budget Predictions

By Cathi Norman - April 28, 2016

Prior to a Federal Budget there is always much speculation regarding possible changes that may occur within the superannuation system.

We have listed below the areas predicted most likely to be affected by the 2016 Federal Budget and potential strategies that may be considered.

Reduction of the Division 293 tax threshold

  • It is predicted that the current income threshold of $300,000 may be reduced to $180,000.  This would result in individuals earning over $180,000 per year paying an extra 15% tax on their concessional superannuation contributions.
  • Strategy: Individuals earning over $180,000 per year may consider maximising their concessional superannuation contributions during the 2016 financial year.  For added caution, these individuals may also consider making their contributions prior to the budget announcement on 3 May 2016.

Reduction of superannuation contribution caps

  • It has been predicted that the current concessional contribution cap may be reduced from $30,000 per year to $20,000 per year.
  • It has also been predicted that the current non-concessional contribution cap of $180,000 per year may be reduced to $120,000 per year.
  • Strategy: Individuals may consider maximising their superannuation contributions during the 2016 financial year.  For added caution, individuals may also consider making their contributions prior to the budget announcement on 3 May 2016.

Changes to transition to retirement pension rules

  • Various possibilities in relation to transition to retirement pensions have been mentioned, including a tightening of the current rules, or even abolishment of transition to retirement pensions.
  • Strategy: Individuals looking at starting a transition to retirement pension may consider establishing the pension prior to the budget announcement on 3 May 2016.

Other articles


 

Top of Page


 Back to News




IN THIS SECTION:


Rob Southwell

Sydney

Managing Partner and Partner – Private Clients Group


> View profile

John Brazzale

Melbourne

Chairman - Pitcher Partners Association Partner/Executive Director - Tax Consulting


> View profile

Michael Minter

Newcastle

Managing Partner


> View profile

Bryan Hughes

Perth

Chairman


> View profile

Tom Verco

Adelaide

Managing Principal


> View profile

Ross Walker

Brisbane

> View profile



Partnership fraud

SUCCESS

Paperwork and independent advice saves partnerships from fraud

Discover more

Kia Ora Horse Stud

CASE STUDY

Pitcher Partners fills a Financial Manager gap to keep the business on track

Discover more

Fuel Injection Company Administration

LEADERSHIP

A fuel injection company began life as an Australian public company before being acquired by a UK publicly listed company while in the research and development stage of a “green...

Discover more



@PitcherPartner RT : .Paul Ostrowski CEO kicks off Healthcare Briefing on Consumer Directed Care… https://t.co/33DwssT8TM