Key superannuation changes for the 2014/15 financial year

The schedule for increasing the superannuation guarantee rate to 12% has changed, the Federal Budget reveals.

From July 1, 2014 it will increase to 9.5%, as planned. It will remain at 9.5% until July 1, 2018 (10%), and then increase by 0.5% a year until July 1, 2022 (12%).

Inadvertent breaches of the contributions cap will no longer be penalised.

The government will allow individuals the option of withdrawing superannuation contributions in excess of the non-concessional contributions cap made from July 1, 2013 and any associated earnings, with these earnings to be taxed at the individual’s marginal tax rate.

Final details of the policy will be settled following consultation with key stakeholders in the superannuation industry.

The measure delivers on the government’s election commitment to develop an “appropriate” process that addresses all inadvertent breaches of the contribution caps where the error would result in a disproportionate penalty.

The maximum amount superannuation guarantee charge is calculated on is $185,000.

The government will continue the gradual increase in the age pension age to 70 by July 1, 2035. The government will also index pensions to inflation from September, 2017.

The government will not include the family home in the means test for the age pension. All pension assets test and income test thresholds will be fixed for three years from July 1, 2017.

Maintaining these thresholds will not lead to any reduction in the rate of the pension.

From September 1, 2017, the government will link pension increases only to inflation. For the purposes of the pension income test, the government will also change how it deems the return from a person’s financial assets.

The government will reset the deeming thresholds from $46,600 to $30,000 for singles and from $77,400 to $50,000 for couples from September 2017.

This publication was issued by First Super Pty Ltd (ABN 42 053 498 472, AFSL 223988), as Trustee of the First Super superannuation fund (ABN 56 286 625 181). It does not consider your personal circumstances and may not be relied on as investment advice. Content was accurate at the date of issue, but may subsequently change. You should contact us on 1300 360 988 for updated information and to obtain a copy of the product Disclosure Statement.