Another change to superannuation announced by Wayne Swan, Bill Shorten and the Labour Party.

The key changes:

·         impose a 15% tax on the earnings above $100,000 from superannuation retirement accounts that have moved into the pension phase

·         the $100,000 income threshold will also be liable for capital gains tax

o        there is a transition period for existing assets already held

o        assets that have already been acquired would only be assessed for capital gains that accrue after 1 July 2024

·         assets acquired after 1 July next year will be potentially taxable for capital gains if the $100,000 income hurdle is cleared

·         the cap on concessional contributions to super will be expanded again, from $25,000 to $35,000 from 1 July 2013 for people aged 60 and over

·         for people 50 years and over the cap on concessional contributions to super will be expanded from $25,000 to $35,000 from 1 July 2014

·         the plan is to lift the cap generally to $35,000 by 1 July 2018

It is difficult, the goal posts in superannuation have moved again.

As an example, prior to the announcement by Swan and Shorten, if you had retired and your superannuation account was in the pension phase, your established nest egg was providing an annual income of $150,000 to meet lifestyle requirements, no tax was payable on the earnings.

As a result of the announcement, the same $150,000 will attract tax of $7,500 leaving the fund having to earn more to provide the same benefit for members.

Keep in mind these changes are a long way from being finalised.  We are in an election year and the proposed legislation may not come into effect.

Watch this space . . .