From tomorrow a range of super reforms will make it easier and more attractive for Australians to contribute to their super savings so they can retire when they’re ready, Minister for Revenue and Assistant Treasurer, Senator Helen Coonan, said today.
“Reforms to the work test and rules governing contributions to super savings are in addition to the extended super co-contribution and the reduction in the surcharge that passed Parliament last week,” Senator Coonan said.
“The more generous co-contribution of $1.50 for every dollar contributed by workers earning up to $28,000 (up to $1500) commences tomorrow. Those earning up to $58,000 will also benefit from the co-contribution which phases out at the rate of five cents for every dollar earned over $28,000, cutting out completely at $58,000.
“The superannuation surcharge will be reduced from 14.5 per cent to 12.5 per cent tomorrow and will be further reduced to 10 per cent from 1 July 2005.
“Workers will be able to choose where they invest their super savings from 1 July 2005 but from tomorrow superannuation portability is introduced. This allows workers to consolidate their inactive super accounts and avoid multiples fees and charges eating away at small super balances.
“From July 1, all Australians aged under 65 will be able to contribute to their superannuation whether they are working or not. This makes contributing to super savings more available to all Australian workers and will particularly benefit women and people in part-time or casual work.
“The work test that applies to people aged 65 to 74 will also be changed. Currently people aged between 65 and 74 must satisfy a 10 hour per week test. This often acts as a disincentive for those people who would like to stay in the workforce and continue to contribute to their super.
“From tomorrow those between 65 and 74 who work at least 40 hours in a consecutive period of 30 days will be able to make contributions for the rest of the financial year.
“And from 1 July 2004 people who turn 75 will now be required to access their superannuation and to preserve employer Eligible Termination Payments which are rolled over into superannuation.
“People who are currently 75 or who turn 75 before 1 July 2004 will not be affected by this announcement.
“The tax on transfer of overseas superannuation will also be reduced from 1 July and the payment arrangements fairer. The changes will encourage the transfer of superannuation into Australia, which is good for individuals and good for funds
“All of these significant measures are important to a flexible and adaptable retirement incomes system and help Australians to retire when they’re ready.
“Super provides Australian workers with the best potential to save in a tax advantaged way and to achieve economic independence in retirement.”