Business

Super changes now in effect

Barry Leddicoat

ARE you aware of the changes to super that came in on July 1? Prime Super advisor Karen Hyland has put together the following information for businesses.

Concessional contributions cap: The government limits the amount of money you can contribute to your super account at a favourable tax rate. This is known as the concessional contributions cap.
In last year's budget, the government announced that from July 1, 2012, it would increase the amount over 50s could contribute pre-tax from $25,000 to $50,000 if they had less than $500,000 accumulated in super.
However in this year's budget the government announced that this limit would no longer apply and this increase would be deferred for two years.
This means that the current concessional contributions cap of $25,000 will apply to everyone, no matter their age, for the 2012-13 and 2013-14 financial years.

Super contributions tax increase for high income earners: If you make contributions into your super account from your pre-tax salary, those contributions (up to the concessional contributions cap we mentioned above) are subject to a 15% contributions tax.
From July 1, the government wants to double the contributions tax rate for high income earners.
This will mean that if you earn more than $300,000, the tax deducted on your pre-tax contributions will double from 15% to 30%.

Increase in superannuation guarantee: From July 1, 2013, the SG rate will increase from 9% to 9.25%. It will continue to increase incrementally until it reaches 12% on July 1, 2019.

Removal of SG age limit: From July 1, 2013, the SG age limit will be removed and employers will be required to make SG contributions for all eligible employees aged 70 years and older.

Concessional cap indexation paused for 2013-14: The government will pause indexation of the superannuation general concessional contributions cap for one year in 2013-14, so it remains at $25,000.
Indexation of the cap will be deferred until 2014-15, when the cap is expected to rise to $30,000. Indexation of the non-concessional contributions cap will also be paused.

Income stream draw-down relief to be extended for another year: In the aftermath of the GFC, the Federal Government provided draw-down relief to income stream members by applying a 50% reduction in the minimum payment amounts for account-based, allocated and market linked pensions.
The minimum payment amounts were due to return to normal in 2012-13, however the government has extended the draw-down relief for an extra year.
Please refer to the ATO website for more details about the minimum amounts.

Co-contribution matching rate to halve: From July 1 this year 2012, the co-contribution matching rate will halve from 100% to 50%.
The government will also reduce the upper threshold limit from $61,920 to $46,920.

Low income super contribution: As announced in the government's response to Australia's future tax system review and in the 2010-11 Federal Budget, the government will provide a new super contribution of up to $500 annually for eligible low-income earners from the 2012-13 income year.
The payment will be 15% of the eligible concessional contributions (including employer contributions) made by or for individuals with adjusted taxable incomes of up to $37,000 - this amount is not indexed. Individuals will also need to meet a test where at least 10% of their income must be from employment or business sources and they are a resident of Australia or New Zealand.

Prime Super is a not for profit Industry Superannuation Fund. This article contains general information only and does not take account of your personal circumstances. You should obtain personal advice where appropriate. Prime Super (ABN 60 562 335 823) is issued by Prime Super Pty Ltd (ABN 81 067 241 016, AFSL 219723). A Short-Form Product Disclosure Statement is available from the issuer by phoning 1800 675 839.
 

Topics:  superannuation




Join the Community.

Get your local news, your way.

Stay Connected

Update your news preferences and get the latest news delivered to your inbox.

We are more likely to die avoidable deaths

Special report reveals shocking health statistics

Sandy Creek crash

KART ACTION: Karts flying at Sandy Creek Raceway today

Kart rollover at Sandy Creek

Rodeo tradition remains

The floral window competition will return to rodeo week this year

Rodeo tradition to carry on

Latest deals and offers


Tom works out

The Voyage Fitness crew help Tom hardy with his workout.

RACQ releases SE Qld's worst choke points

Paul Turner, RACQ

Paul Turner from RACQ talks about our worst roads at peak time.

British family bashed in Thailand

Family beaten and kicked unconscious by gang in Thailand.

Family beaten and kicked unconscious by gang in Thailand.

Mayor: confidence is key to filling empty shops

Former Destination Southern Downs business implementation manager Tracy Dobie has announced she will be running for Mayor. Photo Contributed

Dobie to lead economic development committee

Warwick commercial property market in ‘decline’

The old Mango camping store on Albion St is for sale/lease at the moment. It's been empty since late February after housing the camping business for 10 years.

Business confidence affects commercial property sales

Demand for acreage lots pushes up property prices

Property values in Cooroy have increased 25%

Property values jump in Cooroy and Peachester.