Controversial $500,000 lifetime non-concessional contributions cap scrapped
The announcement of the $500,000 lifetime non-concessional contributions (NCC) cap in the 2016-2017 budget was not only controversial, especially given what was widely perceived as its retrospective operation, but raised many questions as to how it would be applied.
The Government has announced that the proposed lifetime cap will not proceed but will be replaced by a new measure that will:
- reduce the existing annual NCC cap from $180,000 to $100,000 per year;
- retain the ability for members aged less than 65 to bring forward 3 years’ worth of NCCs; and
- prohibit members with a superannuation balance of more than $1.6 million (indexed) from making further NCCs from 1 July 2017.
As the new measure will not produce the same budget savings as the lifetime cap, the Government has also announced that:
- the work test will not be abolished; and
- members with less than $500,000 in superannuation will not be able to “catch up” on unused concessional contributions until after 1 July 2018.
More details of this announcement can be found here.
To discuss this article, or for further information please contact:
Melanie Twomey
Senior Associate
T 03 5225 5238
E mtwomey@ha.legal
or
Nicole Stornebrink
Associate
T 03 5225 5209
E nstornebrink@ha.legal
