The Turnbull Government’s 2016-17 Budget superannuation taxation reforms continue to improve the flexibility of the superannuation system with the commencement this week of the catch-up carry forward superannuation measure.
From 1 July 2018, millions of individuals with balances below $500,000 will be able to ‘catch up’ on their retirement savings by accessing unused portions of their concessional contributions cap. These unused portions can be carried forward for five years to enable extra contributions from 2019-20 onwards where people have the financial capacity to do so.
“The Turnbull Government’s superannuation taxation reforms have given individuals, especially women, more control over their superannuation savings and will support their economic security in retirement,” Minister for Revenue and Financial Services, Kelly O'Dwyer MP said.
This measure recognises the reality of modern careers. It will be of particular assistance to people who are absent from the workforce because of illness or injury, caring responsibilities or to undertake further study.
“This important measure will make it easier for those with interrupted work patterns to save for retirement and benefit from the tax concessions commensurate with individuals who have a regular income,”
“Shamefully the Labor party opposes this measure and would scrap it if they got the chance, preventing these people from being given the opportunity to boost their retirement savings.”
This measure completes the implementation of the comprehensive suite of measures in the 2016-17 Budget to improve the fairness and flexibility of the superannuation system, including:
- the Low Income Superannuation Tax Offset, which increases the superannuation savings of around 1.9 million women each year;
- expanded eligibility for families to claim a spouse tax offset for contributions to the superannuation account of a low income spouse; and
- increased access to personal deductible superannuation contributions, which allows 800,000 Australians, including people without access to salary sacrifice arrangements through their employer, to make additional concessional contributions to their retirement savings.
These measures complement the Government’s existing superannuation co-contribution scheme, which matches after-tax contributions of low income earners at a rate of 50 per cent up to $500. Almost 320,000 low and middle-income earning women benefited from this measure in 2015-16, to the tune of around $100 million.