Recent superannuation reforms - TAPS Workplace Review
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Recent superannuation reforms TAPS Workplace Review
From the employer’s point of view,
QSuper was well aware that they
were not always the easiest to
deal with. That has changed now
Stuart Clements and I am excited to be leading a
Head of Employer
& Advisers, QSuper team that is making a real
difference to delivering the best
possible outcomes and experience
for employers.This information has been prepared for general purposes only without taking into account your personal objectives, financial situation, or needs. You should consider the appropriateness of the information for your circumstances and read the product disclosure statement (PDS) before deciding whether to acquire, or continue to hold a product. You can obtain a PDS from our website or by calling us on 1300 360 750. This information is provided by QInvest Limited (ABN 35 063 511 580, AFSL 238274) (QInvest) on behalf of the QSuper Board (ABN 32 125 059 006 AFSL 489650) as trustee for QSuper (ABN 60 905 115 063). QInvest is ultimately owned by the QSuper Board as trustee for QSuper, and is a separate legal entity responsible for the financial services it provides. Advice fees may apply. All QSuper products are issued by the QSuper Board as trustee for QSuper. Where the term ‘QSuper’ is used in this presentation, it represents the QSuper Board or QInvest unless expressly indicated otherwise. Whilst all care is taken in the preparation of this material no warranty is given with respect to the information provided, and accordingly no responsibility for errors or omissions, including responsibility to any person by reason of negligence is accepted by QSuper, QInvest Limited or any of its representatives. The QSuper Board owns the copyright in this information (or has a licence to use the copyright where it is owned by another party). You may reproduce this information for personal, non-commercial use only. You may not distribute or transmit this information to any other person or otherwise use this information without obtaining the QSuper Board’s prior written consent. © QSuper Board of Trustees 2017. All rights reserved.
Major • Most 2016 Federal Budget changes took effect from
1 July 2017.
changes
• 2017 Budget announcements are not legislated
to super therefore may change.
• Many people will not be affected by these changes.
• Important for employees to know that lower
contribution caps could make it harder to ‘catch
up’ their super later in their career.Money in Employer Gross salary Bank account
Concessional Employer Salary Deductible
contributions contribution sacrifice contribution
(before-tax)
QSuper
accountMoney in
AFTER
BEFORE
Concessional Old annual cap New annual cap
contributions
(before-tax) $30,000 $25,000
if aged < 50 for everyone
$35,000
if 50+Money in
BEFORE AFTER
Concessional Possible to claim a tax Able to make catch-up
contributions deduction if $25,000 contributions:
(before-tax) limit not used • From 1 July 2018 –
benefit from 2019/20
Extra 15% tax if income
plus concessional • Carry forward unused
contributions is over cap space (up to 5
$250,000 years)
• Requires a balance
under $500,000Money in Employer Net salary Bank account
Money in Regular
Non-concessional
Lump sum
contributions
contributions
(after-tax)
QSuper
accountMoney in
AFTER
BEFORE
Money in Old caps New caps
Non-concessional $180,000 $100,000
contributions per annum per annum
(after-tax)
$540,000 $300,000
3-year bring forward 3-year bring forward
• Subject to a $1.6m balance
eligibility threshold
• Transitional rules in place if
you have already triggered
the bring forward ruleAn 18% tax offset
of up to $540
Money in
BEFORE AFTER
Spouse Old thresholds New thresholds
tax offset to get full amount
• $3,000 contribution to a
• $3,000 contribution spouse
to a spouse
• Receiving spouse can
• Receiving spouse earn up to $37,000
can earn up to (assessable)
$10,800 (assessable)
• Cuts out at $40,000
• Cuts out at $13,800How things work
post 1 July 2017
Example 1 Jason Jason might consider
Jason • Aged 40 earning $80,000
a year
• Salary sacrificing voluntary
contributions of up to $10,800
• Has an accumulation • Making a lump sum
account of $300,000 contribution of up to $10,800
• Salary sacrificing his and claim a tax deduction
standard contribution of • Making a spouse contribution
5% (total concessional to Jill
contributions of $14,200) • Splitting his superannuation
• His spouse is currently contributions to Jill
on maternity leave but • Plan to catch-up on making
will return to part-time contributions in future years
work in the futureHow things work
post 1 July 2017
Example 2 Mike Mike might consider
Mike • Aged 55 and single and
working
• Making non-concessional
contributions – $100,000 per
• Accumulation account of year or ‘bringing forward’
$200,000 three years of contributions –
$300,000
• Received an inheritance
of $400,000 • Using some funds in excess of
the $300,000 limit to
• Wants to save for his contribute to super and claim
retirement a tax deduction (up to the
$25,000 limit) yearsMoney out Transfer
Regular
payments
Pension phase Accumulation Income Bank
from July 2017 account account
• Transition to retirement income accounts – tax on
earnings up to 15% (same as accumulation phase)
• Transfer balance cap of $1.6mHousing
affordability
Two first home buyers
1
proposed
changesHousing
affordability
Two first home buyers
1
proposed
changes
Encouragement
to downsize
2
Note that these budget announcements may be subject to change.Withdraw voluntary contributions from super for a
house deposit:
Housing • Cannot have previously owned a home
affordability • Maximum withdrawal of $30,000 per person
• Up to $15,000 in voluntary contributions per year
• Contributions from 1 July 2017. Withdrawals from 1 July 2018
First home
• Any concessional contributions withdrawn are taxed at marginal
buyers rate less 30% tax offset
$
Salary
QSuper House
account deposit
Up to Up to
$15,000 pa $30,000Contribute up to $300,000 from the sale of the
family home:
Encouragement • Must be over 65
to downsize • Must have owned the home for 10+ years
• No work test or age restriction BUT is counted for Age
Pension asset test
• Doesn’t count towards the non-concessional contribution cap
• Not required to have a total super balance of under $1.6M
Property QSuper
Proceeds Up to account
$300,000
(Non-concessional)Why is super • Retirement funding is one of your employees’ key
financial objectives.
important?
• Super is a powerful and tax-effective savings option.
• Super can sometimes seem complicated, but we’re here
to provide whatever help you need.When we With our award-winning
win, our investment strategy
employers &
members win
Note: Past performance is not a reliable indicator of future performance. For
the QSuper Lifetime option only. Awards and ratings are only one factor when
deciding how to invest your super. Chant West does not issue, sell, guarantee
or underwrite this product. For further information about the methodology
used by Chant West, see chantwest.com.auThank you
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