February 2016 Edition-Proposed superannuation changes
Proposed superannuation changes

Proposed superannuation changes

- what they mean for you

Australia's superannuation industry is often affected by changes in government policy as well as new guidelines proposed by regulating authorities and the superannuation industry itself.


Below are some of the proposals currently being reviewed:


  • A proposal from the Australian Labor Party to limit tax concessions on super earnings so that the first $75,000 of returns is tax free. Labor will target the tax concession for earnings on superannuation assets supporting retirement income streams therefore this measure will only apply to those in retirement. Given a 5% return this would mean that the measure will affect people with more than $1.5 million in their superannuation. This reform will not impact full or part aged pension as the basic income test for the aged pension (singles and partnered) is under the $75,000 threshold. Under the proposal, capital gains will be grandfathered.


  • The Financial Services Council (FSC) has joined calls for a super tax rebate to be introduced. This would mean that instead of concessional contributions being tax-deductible they would be subject to a tax rebate. The FSC said superannuation contributions should be taxed at an individual's marginal tax rate with a 20 per cent rebate. The FSC released modelling by PwC last Wednesday showing that a 20 per cent rebate on the marginal tax rates for super contributions would be budget-neutral.


  • The Financial System Inquiry proposes that super funds pre-select a comprehensive income product that their members will receive (unless the member wants to change).


  • The Productivity Commission has proposed changes to the way that default super products are selected throughout Australia.



Which of these will get through and become law? We will keep you posted, continue visiting the Goodwin Chivas & Co monthly newsletter to find out.


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