- Lowering the superannuation concessional contributions cap to $25,000 per annum. See Reforming the taxation of concessional contributions on the Budget 2016–17 website fact sheet page.
- Allowing catch-up concessional contributions on a rolling basis for a period of 5 years. See Allowing catch-up concessional contributions on the Budget 2016–17 website fact sheet page.
The concessional contributions cap will reduce to $25,000 per annum for everyone regardless of age from 1 July 2017. For the 2016/17 financial year, the cap is $30,000 per annum, or $35,000 per annum for members aged 49 years or older as at 30 June 2016.
From 1 July 2017, notional (estimated) employer contributions will be included in the concessional contributions cap for the first time for members of unfunded defined benefit schemes and constitutionally protected funds.
The following contributions will count toward the concessional contributions cap from 1 July 2017:
- any salary sacrifice contributions
- any superannuation guarantee contributions
- any employer productivity contributions
- notional employer contributions
Notional employer contributions will be calculated using actuarial formula. Further information and example calculations will be made available in the near future.
If employer contributions (notional and actual) paid in respect of a defined benefit cause a member to exceed their concessional contributions cap, they will be regarded as having used all of their cap space but will not be regarded as having an excess amount. However, they will be unable to make additional concessional contributions elsewhere, such as salary sacrifice payments.
From 1 July 2018, individuals with an account balance* of less than $500,000 will be able to access their unused concessional contributions cap space on a rolling basis for 5 years. Amounts carried forward that have not been used after 5 years will expire. Only unused amounts accrued from 1 July 2018 onwards can be carried forward.
*A members ‘account balance’ will include their scheme equity (the ‘accumulation phase value’), the balance of their Transfer Balance Account, as well as any transferred amounts that have not been counted elsewhere. Due to the complex nature of defined benefit schemes, clarity is still being sought as to how the scheme equity will be calculated for the purposes of this measure.
Given the complexities of these new measures, a fact sheet will be uploaded to the CSS website in the near future to help better understand these changes.