HOW SUPER CHANGES AFFECT YOU:

AN OVERHAUL of superannuation rules on July 1 will potentially affect every working Australian.

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 thinking about putting extra money away for their retirement.

Exclusive new figures from the Association of Superannuation Funds of Australia 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.

ASFA’s data also shows that about 270,000 older Australians have transition to retirement pensions, which are getting their tax benefits cut, and 110,000 people with more than $1.6 million sitting in a tax-free super pension will lose money by having to move out their excess funds by July 1.

On the flip side, more than three million people — two thirds of them women — are winners from a new Low Income Superannuation Tax Offset, which extends a previous similar offset and is estimated by ASFA to be worth an average $260 per person.

Another 850,000 people will benefit from allowing a tax deduction 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 much of the attention around the changes — first announced in last year’s Federal Budget — had been focused on the tougher rules for wealthy savers and retirees.

“We think some of the other benefits are being overshadowed,” she said.

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 for it — will no longer be forced to set up salary sacrifice arrangements in advance.

From July they can inject it at any time, but will have to fit it within a new lower annual contribution cap of $25,000.

Many people have been rushing to pile extra cash into their funds ahead of the changes. Investment giant Colonial First State said voluntary contributions to its super funds in May were 166% higher than May 2016.

“People are taking advantage of the higher non-concessional cap while it’s still available, to really maximise their savings into super, before it reduces on 1 July,” Colonial First State executive manager Craig Day said.

However, he warned people to act fast, because CFS data from last year showed more than one in five people missed the cut-off when making electronic funds transfers in the final week of June.

Industry leaders say the endless fiddling with superannuation rules is driving people away.

Kinetic Super chief executive officer Katherine Kaspar said the constant tinkering was “not making it easy for Australians to understand”.

“We are missing the boat particularly for young Australians who are keeping superannuation on the backburner and it’s not something at the front of their mind,” she said.

New St George research found that half of Australians aged over 50 are ignoring super’s tax benefits and instead diverting their cash into low-interest savings accounts.

St George retail banking general manager Ross Miller said too many Australians did not review their finances.

ASFA chief executive officer Martin Fahy said people should read all the communications they were receiving from their super funds ahead of the July changes.

“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.”