Super changes will affect us all

AN OVERHAUL of superannuation rules is set to affect most working Australians, who have been urged to educate themselves to maximise benefits and minimise hits to their nest egg, ahead of the July 1 changes.

While the Federal Government was quick to suggest its super changes are only negative for a small proportion of wealthy workers and retirees, the scope of the changes impacts low-income workers, parents, spouses, pre-retirees and anyone contributing extra money for their retirement.

Association of Superannuation Funds of Australia chief executive Martin Fahy said people should study the communications from super funds.

“Contact your super fund if you have questions and they will be able to help you through it. Don’t avoid it, don’t put your head in the sand,” he said.

“This is an opportunity to make sure you check in on your super and you can take advantage of the short period of time that’s left (before June 30) under the old regime and that you are well set up for the new regime.”

ASFA figures show that up to 800,000 people could be worse off from higher super taxes and the lowering of contribution caps that reduce the amount people can tip into their fund. It also found: TAX benefits will be cut for about 270,000 older Australians who have transition-to-retirement pensions; ABOUT 110,000 people with more than $1.6 million sitting in a tax-free super pension will lose money by having to move out excess funds by July 1; MORE than three million people — two-thirds of them women — benefit from a new Low Income Superannuation Tax Offset, extending a previous similar offset and is estimated by ASFA to an average $260 per person; and, ANOTHER 850,000 people benefit from tax deductions for personal super contributions made at any time, while tens of thousands more people are positively affected by initiatives around spouse contributions, home downsizing and first home saver accounts linked to super, it says.

Dixon Advisory head of advice Nerida Cole said benefits of the changes — announced in last year’s Federal Budget — had been overshadowed.

For example, free money in the form of a $540 tax rebate for people who deposit $3000 into a low-income spouse’s super fund will be much easier to access from July. Currently the spouse must earn less than $13,800 to be eligible but this is rising to $40,000.

“A much bigger group of people will be able to take up that benefit,” Ms Cole said.

Workers wanting to put extra money into super — and claim a tax deduction — will no longer be forced to set up salary sacrificing in advance.

From July they can inject it at any time.