Breaking - Govt scraps $500,000 lifetime Super cap

[Andrew Williams]

This is good news for UK Pension Transfers!!!

 

 

The Government will scrap a key element of its superannuation reforms, doing away completely with the controversial $500,000 lifetime cap on non-concessional contributions.

 

The shock announcement came after The Daily Telegraph exclusively revealed Treasurer Scott Morrison would take the revised package to the coalition party room this morning.

Mr Morrison confirmed the retrospective $500,000 lifetime cap on non-concessional contributions would be replaced by a new measure limiting non-concessional contributions to $100,000 a year, down from a cap of $180,000.

 

That means workers will be able to put up to $100,000 a year to top up their superannuation from after tax income until their superannuation reaches a limit of $1.6 million.

 

 

Mr Morrison said all up, Australians could contribute $325,000 a year, with tax concessions, until they reach the limit of $1.6 million.

 

The revised package has received backing from the coalition party room after conservative MPs were furious the $500,000 cap, which limited tax concessions on superannuation, had angered the party’s base.

 

That is regarded as a big win for Mr Morrison who secured Labor backing for $6 billion in savings earlier this week.

 

Mr Morrison said he expected Labor would support the superannuation package and insisted the compromise showed the 45th parliament would work.

 

“What I accept is when you’re in government you have to solve problems, you have to work issues and you have to get to conclusions and that’s what we’ve done,’’ he said.

 

 

“What we’re demonstrating this week is we can get things done in the 45th Parliament which is what we were elected to do. Now many were observing, compensating, that this wouldn’t be possible. That this Parliament wouldn’t work. Now, still a long way to run, but I think the early runs on the board.”

 

“It removes every impediment that Labor had mentioned.’’

 

Former cabinet minister Eric Abetz, who had led the party room crusade against the $500,000 cap, immediately welcomed the change.

 

“The removal of both the $500,000 concessional cap and any retrospective elements is what the superannuation community told me were the two major concerns with the package and I am pleased those components, in particular, have been removed and that other components have been delayed,” he said.

 

The revised package is a big win for the government. The cap had become a sticking point for the Government which was facing a major backlash within the Coalition party room to get unified support for the super reforms that had been taken to the election.

 

Mr Morrison is understood to have wanted the superannuation issue sorted before a three week break of parliament.

 

It is understood Labor had planned to use the final Question Time today to reignite the superannuation debate, knowing it would cause division within the party.

 

The opposition laid the platform grilling Revenue Minister Kelly O’Dwyer in parliament yesterday.

 

THE FACTS

 

WHAT’S ON THE TABLE NOW FOR SUPERANNUATION

* Cut annual non-concessional contributions cap to $100,00 a year (down from $180,000).

 

* Under 65s can still “bring forward” three years’ worth of non-concessional contributions in a lump sum.

 

* Those with with superannuation account balance of more than $1.6 million can’t make non-concessional (after tax) contributions after July 1, 2017. * They can make “catch-up” concessional contributions starting from July 1, 2018 (delayed by a year).

 

WHAT DOES THIS MEAN?

Each year you will be able to contribute up to $125,000 to your superannuation (combined before and after tax amounts) until your account balance reaches $1.6 million. If you want to “bring forward” a lump sum, you can contribute up to $325,000 in any one year.

 

WHAT IS NO LONGER PLANNED?

* A $500,000 lifetime cap on non-concessional contributions, backdated to 2007. * Keeping a work test for people aged 65-74 who want to make extra contributions to their super.

 

 

http://www.dailytelegraph.com.au/new...7537e0432b67f3