The 2011/2012 Federal Budget was released on Tuesday night covering various changes in respect of superannuation. Once again the Government has been tinkering with the superannuation legislation and as a result have brought about the following changes:
Effective from the 1 July 2011 eligible individuals with excess concessional contributions of up to $10,000 (not indexed) will be able to elect to have a once off refund. This election however is limited to those exceeding the concessional contribution cap for the first time.
Rather than taxing the excess concessional contributions at 31.5% with an additional 15% of tax for the fund, these individuals will be able to take their refund amounts and have them included under assessable income and taxed at their marginal rate of tax. This change will benefit individuals who have a marginal tax rate lower than 46.5% (including Medicare levy). It's important to note that Individuals who have exceeded their concessional contribution cap prior to 1 July 2011 will not be able to benefit from these new measures as they are prospective.
Following on from the 2010/11 Budget announcement in respect to the increase of concessional contributions for those individuals aged over 50 and have a total balance of $500,000 or less in their superannuation accounts. Effective from 1 July 2012 these individuals will be eligible for a concessional superannuation contribution of $25,000 above the general concessional contribution, therefore a total contribution of $50,000.
From 1 July 2012 the Government will also require employee payslips to include the amount of superannuation actually paid into the employee accounts. Additionally both employees and employers will be receiving quarterly notifications from their superannuation funds if regular payments cease. This new requirement will encourage individuals to monitor their accounts and be more involved in respect to their superannuation investments as constant information will be readily available.
Employers should also note the director penalty regime will now be extended to superannuation guarantee amounts making directors personally liable for their companies' failure to pay employee superannuation.
For further information on the above please contact the authors or your Moore Stephens Relationship Partner.
This publication is issued by Moore Stephens Australia Pty Limited ACN 062 181 846 (Moore Stephens Australia) exclusively for the general information of clients and staff of Moore Stephens Australia and the clients and staff of all affiliated independent accounting firms (and their related service entities) licensed to operate under the name Moore Stephens within Australia (Australian Member). The material contained in this publication is in the nature of general comment and information only and is not advice. The material should not be relied upon. Moore Stephens Australia, any Australian Member, any related entity of those persons, or any of their officers employees or representatives, will not be liable for any loss or damage arising out of or in connection with the material contained in this publication. Copyright © 2011 Moore Stephens Australia Pty Limited. All rights reserved.
