Newsletter
Federal Budget Newsletter
SUPERANNUATION
Option to withdraw excess non-concessional contributions
The government will give individuals the option of withdrawing excess non-concessional contributions made from 1 July 2013 and any associated earnings, with those earnings to be taxed at the individual's marginal tax rate. (Non-concessional contributions notably include non-deductible personal contributions made from a member's after-tax income.)
Currently, superannuation contributions that exceed the non-concessional contributions cap are taxed punitively at 46.5%. The proposed new measure will bring the tax treatment of excess non-concessional contributions in line with that for excess concessional contributions, for which taxpayers already have a withdrawal option.
Superannuation guarantee rate will rise to 9.5% on 1 July 2014
Instead of pausing the superannuation guarantee rate at 9.25% (as previously announced), the government will now allow the rate to rise to 9.5% on 1 July 2014 and will leave it at this level until 30 June 2018. As such, employers are required to increase their superannuation contributions on behalf of employees to 9.5% of ordinary time earnings from 1 July 2014.
The percentage will then increase by 0.5% each year until it reaches 12% from 2022–2023, a year later than previously proposed.