The Government today [Wed 7.9.2016] released exposure draft legislation proposing to give effect to some of its 2016-17 Budget superannuation proposals. This first tranche of draft legislation includes the:
- Exposure Draft – Superannuation (Objective) Bill 2016;
- Exposure Draft – Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016; and
- Exposure Draft – Treasury Laws Amendment (Fair and Sustainable Superannuation) Regulation 2016.
The draft legislation proposes to amend the ITAA 1997 and SIS Regs to implement the following Budget measures:
- Objective of superannuation – to be enshrined in stand-alone legislation;
- Deducting personal contributions – all individuals up to age 75 will be able to deduct personal superannuation contributions, regardless of their employment circumstances;
- Work test – for making contributions between ages 65-74 will be removed from reg 7.04 of the SIS Regs;
- Spouse contributions tax offset – the low-income threshold will be increased to $37,000 (phasing out up to $40,000) for a tax offset (up to $540);
- Low income superannuation tax offset – will replace the Government low income superannuation contributions. The tax offset (up to $500) will apply to concessional contributions for those with adjusted taxable income up to $37,000.
DATE OF EFFECT: 1 July 2017.
SUBMISSIONS are due by 16 September 2016.
Importantly, this tranche of legislation does not cover the more contentious measures announced in the 2016-17 Budget. The Government said it will continue to work with stakeholders to progress implementation of the other Budget measures, including the proposed $500,000 lifetime cap for non-concessional contributions; the $1.6m transfer balance cap for retirement accounts; $25,000 concessional contributions cap; catch-up contributions for balances below $500,000; reduced tax concessions for transition to retirement pensions; and anti-detriment deductions.
A full report will be published in Thomson Reuters Weekly Tax Bulletin (Issue 38, 9 September 2016).