(Australian Associated Press)
Low-paid workers and carers are set to benefit from a federal budget move to wind back tax breaks for the wealthiest retirees.
Treasurer Scott Morrison will introduce a $1.6 million cap on the total amount of superannuation an individual can transfer into retirement-phase accounts.
The move will affect current retirees and those yet to enter retirement.
People with combined incomes and superannuation contributions greater than $250,000 will pay 30 per cent on their concessional contributions, up from the current 15 per cent.
Also, the concessional contributions cap will be lowered to $25,000 a year.
And a new lifetime cap of $500,000 will be introduced for non-concessional contributions – to stem the use of super for tax minimisation and estate planning.
Mr Morrison said the superannuation system needed to be better targeted to support people to save and not be dependent on the age pension.
From some of the savings, the government will spend $1.6 billion over the next four years on a low income superannuation tax offset to replace Labor’s scheme from June 30, 2017.
This will allow individuals with incomes of $37,000 or less – which includes around two million women – to get a refund of up to $500.
From July 1, 2017, the government will also allow people aged under 75 to claim tax deductions for personal superannuation contributions – especially benefiting carers, those who are partially self-employed or with no access to salary sacrificing.
In addition, the spouse tax offset will be improved, with the income threshold for the receiving spouse lifted from $10,800 to $37,000.
A contributing spouse will be eligible for an 18 per cent offset worth up to $540.
In a bid to allow new retirement products to enter the market, the tax exemption on earnings in the retirement phase will be extended to products such as deferred lifetime annuities and group self-annuitisation products.
You’ll be affected if you:
* Make concessional contributions over $25,000 a year.
* Have income greater than $250,000 a year
* Have a super balance over $1.6 million
* Make or plan to make over $500,000 in non-concessional contributions.