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Media Super seminars on law changes

Wednesday, 25 January 2017
By Print21

Media Super CEO Graeme Russell

Media Super – which finished 2016 as one of the top 10 funds in Australia – is hosting a national seminar series to inform members about the changes coming to superannuation in July.

“The changes affect everyone differently and the free Media Super member seminar will give you the information you need to feel more confident about your future,” says a spokesperson.

The changes to superannuation law that take effect on 1 July 2017 will include: the introduction of a low-income super tax offset (LISTO) and a transfer balance cap, lowering the concessional contributions cap, reducing the Division 293 income threshold and the annual non-concessional cap, expanding tax deductions for personal contributions, altering the tax on investment earnings in transition to retirement income streams (TTRs), and introducing a catch-up measure for those with balances under $500,000. (Details below)

The Media Super seminars will be held in April and May. “After the seminar, you’ll have the chance to meet your local Media Super Business Development Manager and Financial Planner to ask the questions that you need answers to. To set up a workplace session for your employees, contact your local Business Development Manager. 

Media Super finished 2016 as one of the top 10 funds in Australia, with a Balanced (MySuper) return of 8.7% for a 12-month period. Media Super’s Balanced (MySuper) option, in which most members are invested, returned 6.72% for the six months to 31 December 2016, ahead of the median return of 5.51%, placing the company in the top quartile of Australian super funds for the period.

The super changes include:

Low Income Super Tax Offset

The Low Income Super Tax Offset (LISTO) will provide a super savings boost of up to $500 a year for those earning up to $37,000 who have had a concessional contribution made on their behalf. This replaces the existing Low Income Superannuation Contribution (LISC), which is scheduled to expire on 30 June 2017.

$1.6 million transfer balance cap

A $1.6 million cap on the total amount of superannuation savings that an individual can transfer from an accumulation superannuation account to a pension account will be put into effect 1 July 2017. Superannuation savings accumulated in excess of the cap will be able to be maintained in an accumulation superannuation account, where the earnings will be taxed at 15 per cent.

Those individuals already in retirement as at 1 July 2017 with balances in excess of $1.6 million will need to either transfer the excess back into an accumulation superannuation account; or withdraw the excess amount from their superannuation. Transitional arrangements will apply.

Like the Age Pension, the cap will index in line with the Consumer Price Index.

Concessional contributions cap from $30,000 to $25,000

The annual concessional contributions cap of $30,000 for those aged under 50 – or $35,000 for those aged 50 and over – has been lowered to $25,000 for all individuals. The cap will index in line with wages growth.

Reduction of Division 293 income threshold from $300,000 to $250,000

Individuals with incomes over $250,000 will now be required to pay 30 per cent tax as opposed to the current rate of 15 per cent on their super contributions.

Reduction of annual non-concessional cap to $100,000

The non-concessional cap will reduce to $100,000 a year for those aged under 65, with an eligibility threshold of $1.6 million. Individuals whose total superannuation balance is $1.6 million or more at the start of the contribution year, will no longer be eligible to make non-concessional contributions. Transitional arrangements will apply. This is in place of the $500,000 lifetime non-concessional cap that was originally proposed in May.

This reform will replace the current situation, which allowed individuals to make non-concessional contributions of up to $180,000 per year (or $540,000 every three years if aged under 65).

Deduction of personal contributions

Individuals under the age of 65, and those aged 65 to 74 who meet the work test, will be eligible to claim a tax deduction for personal contributions to eligible superannuation funds up to the concessional contributions cap.

Currently this deduction is only available to those who earn less than 10 per cent of their income from salary or wages.

Tax on investment earnings in transition to retirement income streams (TTRs)

Earnings from assets in TTRs will now be taxed concessionally at 15 per cent. This change will apply irrespective of when the TTR commenced.

Catch-up measure for those with balances under $500,000 (effective 1 July 2018)

People with superannuation balances of less than $500,000 will be able to carry forward their unused concessional cap amount from 1 July 2018.

If you would like general advice or further information about how these changes may affect your super or pension, please contact your local Business Development Manager.  

 

 

 

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