Tighter superannuation rules will apply from 1 July 2017 as part of the super reforms announced in last year’s Federal Budget.
The new rules include the introduction of a $1.6 million super balance cap for after-tax contributions; a maximum of up to $25,000 for concessional contributions; and the removal of the current “bring-forward” rule allowing $540,000 of contributions in one year.
Although the new rules will come into effect from 1 July 2017, individuals can take advantage of the current rules to top up their nest egg.
Individuals under 65 who wish to make a large contribution, in particular, those with inheritances or who have recently sold a property or other large asset can make the most of this last-chance opportunity to contribute up to $540,000 until 30 June.
From 1 July 2017, individuals will only be able to bring forward up to three year’s worth of after-tax contributions, i.e $300,000 over three years.
The bring forward rule can not be accessed by those aged between 65 and 74 who meet the work test, however, they can still make annual after-tax contributions.
Those with balances in excess of the $1.6 million cap will need to review their super before 30 June to continue to make after-tax contributions. Furthermore, individuals with a balance close to $1.6 million will only be able to bring forward the annual cap amount for the number of years that would take your balance to $1.6 million.