Treasury have (finally) released details of draft legislation of the first tranche of the 2016 superannuation reform.  Still no word on the controversial contribution cap.

The draft bills and regulations will implement the following measures announced in the 2016-17 Budget:

• the objective of superannuation
• tax deductions for personal superannuation contributions
• improve superannuation balances of low income spouses
• introduce a Low Income Superannuation Tax Offset (LISTO), and
• harmonising contribution rules for those aged 65-74.

The Treasurer and the Minister for Revenue and Financial Services have said that the draft legislation will:

• enshrine the objective of superannuation in legislation, being to provide income in retirement that substitutes or supplements the age pension, which has guided the development of the Government’s reforms
• improve access to concessional contributions by allowing people (under age 75) to claim a tax deduction for personal superannuation contributions, irrespective of their employment arrangements. This will assist around 800,000 people, particularly benefiting those who are partially self-employed, partially wage and salary earners (for example contractors) and those people whose employers do not offer salary sacrifice arrangements
• provide more flexibility and choice for older Australians, including by removing the restrictions that currently prevent some people aged between 65 and 74 from making voluntary contributions to their superannuation. Around 40,000 older Australians will benefit from this change by having increased flexibility to make additional contributions and to increase their retirement savings from sources not necessarily available to them before retirement, such as proceeds from downsizing their home
• encourage more people to make contributions to the superannuation fund of a low income spouse, and
• introduce the Low Income Superannuation Tax Offset (LISTO). Around 3.1 million low income earners will have their superannuation savings boosted by the LISTO, including 1.9 million women. This change will ensure individuals do not pay more tax on their superannuation contributions than on their take-home pay.

Message: don’t get caught by 2016 super reforms.  Seek advice now about how much you can contribute to superannuation