Are you aware of the new superannuation rates and thresholds?
On 1 March 2016, the Australian Tax Office announced new rates and thresholds that apply for the year 1 July 2016 to 30 June 2017 to:
- Super contributions and benefits;
- Employment termination payments; and
- Super guarantee and co-contributions.
Here is a summary of some of the caps for 2016-17:
Changed caps –
- CGT cap amount: $1,415,000
- Untaxed plan cap amount: $1,415,000
The CGT cap amount has increased in 2016-17 to $1,415,000 from $1,395,000 (2015-2016). Here, members may be able to exclude certain super contributions relating to some CGT small business concessions from the non-concessional contributions cap up to the lifetime CGT cap amount.
The untaxed plan cap amount limits the concessional tax treatment of benefits that have not been subject to contributions tax in a super fund and has increased in 2016-17 to $1,415,000 from $1,395,000 (2015-16).
Caps that remain the same –
- Concessional contributions cap (< 49 years of age): $ 30,000
- Concessional contributions cap (49+ years of age): $35,000
- Non-concessional contributions cap: $180,000
The concessional contributions caps remain at $30,000 for members under 49 years of age and $35,000 for members aged 49 years and above. This cap is indexed in line with average weekly ordinary time earnings (AWOTE), in increments of $5,000 (rounded down) and has not changed since 2014-15.
The non-concessional contributions cap remains at $180,000 for 2016-17. It covers contribution’s for which members do not claim an income tax deduction, also known as “after-tax contributions”.
Members aged under 65 years can take advantage of the non-concessional cap for future years in the current year by making non-concessional contributions of up to 3 times their non-concessional contributions cap (provided their total contributions over the 3-year period do not exceed 3 times the cap). This is known as the “bring-forward” option.
Caps relating to employment termination payments have not changed in 2016-17.
What thresholds apply to the super guarantee for 2016-17?
The maximum super contribution base for 2016-17 is $51,620 per quarter ($206,480 per year). This is the salary base from which the indexed limit is calculated for compulsory employer contributions. The maximum super guarantee obligation for an employer is, therefore, $4,903.90 per employee per quarter.
What are the government contribution thresholds for 2016-17?
If you are eligible (based on your income, age, and employment status) and make personal super contributions during the financial year, the government will match your contribution with a co-contribution up to a certain limit.
The co-contribution income thresholds for 2016-17 are as follows:
- Maximum entitlement: $500
- Lower-income threshold: $36,021
- Higher-income threshold: $51,021
The low-income superannuation contribution (LISC) has been maintained in respect of concessional contributions made up to and including 30 June 2017 but will cease from 1 July 2017.
Please note: Trustees of existing funds are not obliged to update the funds PDS for changes in the key rates ad thresholds but these changes must be taken into account by the trustee in managing funds for 2016- 2017.