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Assisting on whole of government technology agreements November 2, 2017

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New key superannuation rates and thresholds

On 1 March 2016, the ATO announced new key rates and thresholds for the year 1 July 2016 to 30 June 2017 applicable to:

  • super contributions and benefits
  • employment termination payments
  • super guarantee and co-contributions.

What are the caps for 2016-17?

A summary of some of the caps for 2016-17 is set out below alongside the comparable 2015-16 rates.

Key caps 2016-17 2015-16
Concessional contributions cap (<49 years of age) $30,000 $30,000
Concessional contributions cap (49+ years of age) $35,000 $35,000
Non-concessional contributions cap $180,000 $180,000
Capital Gains Tax cap amount $1,415,000 $1,395,000
Untaxed plan cap amount $1,415,000 $1,395,000

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 (covering contributions for which members do not claim an income tax deduction, also known as ‘after tax contributions’) remains at $180,000 for 2016-17. Members aged under 65 years may be able to take advantage of the non-concessional cap for future years in the current year by making non-concessional contributions of up to three times their non-concessional contributions cap (provided their total contributions over the three year period do not exceed three times the cap). This is known as the ‘bring-forward’ option.

The CGT cap amount has increased in 2016-17 to $1,415,000. 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.

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:

 Year Maximum entitlement Lower income threshold Higher income threshold
2016-17 $500 $36,021 $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. The ATO states ‘while LISC will continue to be payable in respect of concessional contributions made up to and including the 2016-17 income year, determinations of LISC will cease at 30 June 2019.’

Do I need to update my SMSF deed?

Trustees of existing funds are not obliged to update the fund’s Product Disclosure Statement for changes in the key rates and thresholds but the changes must be taken into account by the trustee in managing the fund for 2016-17.

More information from the ATO

You can read more detailed information about the new key superannuation rates and thresholds on the ATO website.

Author
SUSANNAH STANFORD 1CM B&W JPG 2014
Susannah Stanford | Lawyer
Tel +61 3 9258 3767
E susannah.stanford@maddocks.com.au

 

 

 

 

On 1 March 2016, the ATO announced new key rates and thresholds for the year 1 July 2016 to 30 June 2017 applicable to:

  • super contributions and benefits
  • employment termination payments
  • super guarantee and co-contributions.

What are the caps for 2016-17?

A summary of some of the caps for 2016-17 is set out below alongside the comparable 2015-16 rates.

Key caps 2016-17 2015-16
Concessional contributions cap (<49 years of age) $30,000 $30,000
Concessional contributions cap (49+ years of age) $35,000 $35,000
Non-concessional contributions cap $180,000 $180,000
Capital Gains Tax cap amount $1,415,000 $1,395,000
Untaxed plan cap amount $1,415,000 $1,395,000

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 (covering contributions for which members do not claim an income tax deduction, also known as ‘after tax contributions’) remains at $180,000 for 2016-17. Members aged under 65 years may be able to take advantage of the non-concessional cap for future years in the current year by making non-concessional contributions of up to three times their non-concessional contributions cap (provided their total contributions over the three year period do not exceed three times the cap). This is known as the ‘bring-forward’ option.

The CGT cap amount has increased in 2016-17 to $1,415,000. 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.

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:

 Year Maximum entitlement Lower income threshold Higher income threshold
2016-17 $500 $36,021 $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. The ATO states ‘while LISC will continue to be payable in respect of concessional contributions made up to and including the 2016-17 income year, determinations of LISC will cease at 30 June 2019.’

Do I need to update my SMSF deed?

Trustees of existing funds are not obliged to update the fund’s Product Disclosure Statement for changes in the key rates and thresholds but the changes must be taken into account by the trustee in managing the fund for 2016-17.

More information from the ATO

You can read more detailed information about the new key superannuation rates and thresholds on the ATO website.

Author
SUSANNAH STANFORD 1CM B&W JPG 2014
Susannah Stanford | Lawyer
Tel +61 3 9258 3767
E susannah.stanford@maddocks.com.au