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New Superannuation legislation has been passed and will become effective from July 1, 2007. The new legislation simplifies and streamlines significantly the Superannuation process, removing complex tax arrangements and providing instruments for increasing retirement funds.

Our article outlines the main changes and summarizes the new legislation, but we recommend that you contact your service provider or the Australian Taxation Office if you need further clarification and assistance. Please note that while there are general guidelines applying to the Superannuation and its application in the future, each case needs to be fully investigated in order to assess how the take the advantage of the new legislation in the proper manner.

The main points of the new legislation are:

Payment of benefits from a taxed source, as lumps sum or income stream will be tax free, for most people aged 60 and over.
Reasonable benefit limits (RBLs) will be abolished.
Concessional contributions made to super will have an annual cap of $50,000. Contributions over the cap will be taxed at the rate of 31.5%.
Non-concessional contributions made to super will operate under the annual cap of $150,000. Contributions over the cap will be taxed at the rate of 46.5%.
Self-employed may be able to claim full tax deduction of super contributions and be eligible for Super Co-Contribution.
Personal contributions and employer contributions without a tax file number will be taxed an additional 31.5%.
Ability to Contribute of up to $1 million of non-consessional contributions to your super fund ends on June 30,2007, without incurring the liability for the new excess non-conscession contributions. You can also choose to exclude amounts from the disposal of a small business assets from your $1 million cap, which will allow you to effectively exceed the cap.
The tax treatment of employment termination payments will change.
Exclusion from the transitional non-concessional contributions cap - relevant to non-concessional contributions made between May 10, 2006 to June 30, 2007.
Deductible superannuation contributions extended up to age 75.
From 20 September 2007 the pension assets test taper rate will be halved to $1.50 per fortnight for every $1,000 of assets above the assets test free area.
The superannuation preservation age will not change.
The ATO Supervisory Levy for self managed superannuation funds (SMSF) increases from $45 to $150 per annum.
For SMSFs the ATO will streamline reporting requirements with new administrative penalties for late returns and false statements.
The ATO is also working on improving the operation and effectiveness of reuniting people with their lost superannuation entitlements and it will take more active role in consolidation of lost accounts.

SuperEasy Pty Ltd is not licensed to provide advice on investments, or legalities of the types of investments that you can have. SuperEasy® strongly recommends that you seek professional advice before making any investment choice or decision!

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