Superannuation Changes from 1st July 2017

There are a lot of changes to superannuation coming into effect on 1 July.  The information below relates to the changes to annual contribution caps.

How will the concessional contributions cap change?

Concessional (pre-tax) contributions to your super include:

  • employer contributions
  • any amount you salary sacrifice (pre-tax) into super
  • personal contributions you claim as a personal super contribution deduction

From 1 July 2017, the 10% maximum earnings condition for personal super contributions deductions no longer applies. 

As concessional contributions are paid before tax is applied, it means that your super fund pays tax on the contributions at 15%.

From 1 July 2017, the concessional contributions cap will be $25,000 for everyone. Previously, it was $35,000 for people 49 years and older at the end of the previous financial year and $30,000 for everyone else.

How has the non-concessional contributions cap changed?

Non-concessional (after-tax) contributions include:

  • personal contributions for which you do not claim an income tax deduction, and
  • spouse contributions.

If you have more than one super fund, all non-concessional contributions made to all of your funds are added together and counted towards the non-concessional contributions cap.

From 1 July 2017, the annual non-concessional contribution cap will be reduced from $180,000 to $100,000 per year. This will remain available to individuals aged between 65 and 74 years old if they meet the work test.

From 1 July 2017, your non-concessional cap will be nil for a financial year if you have a total superannuation balance greater than or equal to the general transfer balance cap ($1.6 million in 2017–18) at the end of 30 June of the previous financial year. In this case, if you make non-concessional contributions in that year, they will be excess non-concessional contributions.