Superannuation changes will be introduced to federal parliament giving more than three million low-paid workers certainty over their financial future.
Among the sweeping changes — announced in the May Budget — are a low-income superannuation tax offset that will spare about 3.1 million low-income workers — mostly women — a tax hit from next year simply because their employer is paying their super contributions.
A $500 rebate will refund low-income workers who face paying more tax as a result of compulsory super from next year.
People will also be encouraged to make before-tax contributions to their spouse’s super, with the income threshold for contributions made to a spouse to increase to $37,000.
Workers earning more than $250,000 a year and a new cap of $1.6 million will apply to nest eggs in the tax-free retirement phase.
The big changes are a tax increase from 15 per cent to 30 per cent for workers earning more than $250,000 and slashing the cap on before-tax contributions from $30,000 to $25,000 for all workers.
The proposed $500,000 “lifetime cap” on after-tax super contributions has been replaced with a new limit of $100,000 a year.
Feel free to contact the tax experts at Burwood Tax Returns for more information.