Amendments to Super Reforms

The Government has announced it will amend some of the super reforms proposed in the May 2016 Federal Budget.

We have been busy researching the proposed changes to identify the effects for our clients and will be reaching out to specific clients where we have identified opportunities to benefit from the changes.

Summary of amendments

+ The lifetime limit of $500,000 on non-concessional super contributions won’t proceed.

+ People aged 65 to 74 will still need to meet a ‘work test’ to be able to contribute to super.

+ The opportunity to make ‘catch-up’ concessional super contributions will be delayed by 12 months.

These amendments and the proposals announced in the 2016 Federal Budget could impact your retirement and how you save for it. But at this stage, the proposals are not law and could be refined before they are passed by Parliament.

$500,000 lifetime cap to be scrapped

The original controversial proposal was to replace the existing cap on non-concessional contributions (NCC) with a lifetime limit of $500,000, including all non-concessional contributions made since 1 July 2007.

Instead, from 1 July 2017:

+ The annual NCC cap (currently $180,000 pa) will be reduced to $100,000 pa

+ The maximum NCCs that can be made in one year under the ‘bring-forward rule’ by people aged 64 or less will be reduced
from $540,000 to $300,000, and

+ No additional NCCs will be allowed if your superannuation balance is more than $1.6 million.

Note: Transitional rules will apply for contributions made between now and 2018/19 financial year and it is recommended that you speak with us before making additional contributions.

Like the current rules, a range of conditions will apply and tax penalties may be payable if ‘excess’ non-concessional contributions are made.

Contributions between 65 and 74

Currently, you need to work 40 hours in 30 days in the relevant financial year to make super contributions between 65 and 74. On Budget night, the Government announced they would remove this ‘work test’, but are no longer proceeding with this change.

‘Catch-up’ concessional contributions

The Government is likely to continue with the proposal to reduce the cap on concessional contributions to $25,000 pa from 1 July 2017. However, the start date for making ‘catch-up’ concessional contributions will be delayed by 12 months to 1 July 2018.

Under the ‘catch-up’ rules, it will be possible to contribute more than the annual concessional contributions cap if you haven’t fully utilised the cap in previous years and your super balance is $500,000 or less. This is done by allowing unused cap amounts to be carried forward for up to five consecutive years.

The superannuation landscape is likely to continue to evolve over the coming years making it even more important to continue to be diligent and monitor your retirement savings. We pride ourselves on being experts in researching opportunities and recommending investments and implementing strategies that fit in with our client’s objectives and retirement plans.

For an obligation free conversation about your financial future, please contact us on 03 9603 0072 or at

Phillip Richards

Director and Wealth Advisor

Endorphin Wealth Management

Phillip Richards is a qualified Financial Advisor with more than nine years’ experience in the industry. His expertise in investment, superannuation, SMSF, retirement planning and insurance will help you assess your options to build your wealth. Contact Phillip today to discuss how you can build your own wealth and plan to reach your goals.

This information is general in nature and does not take your personal situation into account. If you are interested in taking control of your wealth, contact Endorphin Wealth Management.