Superannuation reforms were passed by Parliament on 23 November 2016 following public consultation in September and October 2016. The Superannuation (Objective) Bill 2016 sets out the clear objective of superannuation: “to provide income in retirement to substitute or supplement the Age Pension”. The measures took effect from 1 July 2017 with targeted tax concessions.
The Low Income Superannuation Contribution (LISC) has been replaced with the Low Income Superannuation Tax Offset (LISTO). Individuals with a taxable income of up to $37,000 will receive a refund on tax paid on concessional earnings, up to a cap of $500. The amount of the LISTO that an individual is eligible for will be paid into the individuals superannuation account. An estimated 3.1 million low income earners, including 1.9 million women, will benefit from the LISTO.
Concessional contributions access has also improved. Previously the income tax deduction for personal superannuation contributions was only available to those earning less than 10% of total income from salary or wages, limiting those with certain work arrangements. The new reform benefits those who are partially self-employed and partially wage and salary earners, including:
- self-employed contractors
- individuals employed by small businesses
The reform also benefits individuals whose employers do not offer salary sacrifice arrangements, by allowing individuals to make concessional personal contributions up to the annual cap.
more articles about: guide to superannuation
- employer obligations
- superannuation reforms
- how superannuation works
- should they stay or should they go?
- superannuation contribution changes
- compliance options
- changes to SMSF Levy
- super contributions caps
- how to set up a super for an employee
- how much to pay and when
- help for small businesses
- modern awards
- insurance requirements
- salary sacrifice
- boosting employee super
- superannuation guarantee age limit
- records you need to keep
- the importance of communication