Just when you thought you had it all figured out, an announcement from Treasury hits your inbox and plan B is now about to come into law! But it could be argued that all four major changes announced yesterday will make for a fairer super system.
Next week we will report more fully on these rules and what they mean for pre – and post – retirees. But in the meanwhile, here are the headline changes so you can consider if they will make a difference to your own particular situation.
- The proposed extra 15% tax on super balances over $3-million (i.e. to move to 30% tax) has been modified so that the threshold amount will be indexed to inflation.
- This higher tax will no longer be applied to unrealised capital gains
- A second level of taxation – 40% – will be applied to super balances over $10 million
- The Low Income Super Tax Offset (LISTO) which has been frozen for many years, and only applied on earnings up to a cap of $37,000 per annum is changing. The cap will move to $45,000 with the maximum payment moving from $500 to $810 on 1 July 2027. This change will particularly affect women on very low wages.
As noted, this is a quick update on the changes – keep an eye on your inbox next week for a fuller explanation and how different retiree households will be affected.
