Superannuation - 2009 Budget Changes

The pre budget speculation that the transition to retirement condition of release would be removed did not eventuate. However, concessional contribution caps were reduced and a temporary reduction in the matching government co-contribution will occur.

Reducing the concessional contributions caps

The Government has announced a proposed reduction to the contribution caps effective from the 2009-2010 financial year. The reductions are as follows:

• The concessional contributions cap will be reduced to $25,000 per annum (indexed), with effect from the 2009/10 financial year.
• The transitional concessional contributions cap (applicable to individuals aged 50 and over for the 2009/10, 2010/11 and 2011/12 financial years) will be reduced to $50,000 per annum.
• 'Grandfathering' arrangements will apply to certain members with defined benefit interests as at 12 May 2009 whose notional taxed contributions would otherwise exceed the reduced cap.
• The current cap on non-concessional contributions is $150,000 per annum (2008/09 financial year) and will remain at that level in 2009/10. In the future, the cap will be calculated as six times the level of the (indexed) concessional contributions cap.

(source: AMP Financial Planning Pty Ltd)