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
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
For further information on the above please contact the authors
or your Moore Stephens Relationship Partner.
In the years following the global financial crisis of 2008 many Australian investors lost their life savings as financial products failed and the Australian Stock Exchange shed over 3,000 points.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).