Government moves to implement super reforms

The Federal Government has confirmed it will introduce legislation to bring forward the start date of the new higher concessional contributions caps and allow individuals to withdraw excess concessional contributions. 

The proposals were announced as part of the Government’s super reform package last month. 

Over 50s will be able to access the higher cap - $35,000 as opposed to $25,000 - from 1 July 2014, while over 60s will be able to contribute at the higher concessional level from 1 July this year. 

The Government will also move to remove penalties for people who make excess contributions from 1 July, allowing members to withdraw their contributions instead.  

“The Government believes that it is important to allow people who have not had the benefit of the Superannuation Guarantee for their entire working lives to have the ability to contribute more to their super as their retirement age approach,” the Minister for Financial Services and Superannuation, Bill Shorten, said.  

Excess contributions will also be taxed at the individual’s marginal tax rate as opposed to the highest marginal tax rate. 

This reform will ensure that individuals are taxed on excess concessional contributions in the same way as if they had received that money as salary or wages and had chosen to make a non-concessional contribution,” Shorten said. 

He said the measures aimed to improve the fairness, adequacy, and efficiency of the super system.