Superannuation reform package - tranche two

Overview

The Government has released for public consultation the second round of exposure draft legislation and explanatory material to implement the following superannuation measures announced in the 2016-17 Budget: 

• Introduce a $1.6 million transfer balance cap and transitional arrangements for individuals who already have retirement phase balances above $1.6 million; 
• Reform the taxation of concessional contributions (i.e. lower the Division 293 tax income threshold to $250,000 and reduce the concessional contributions cap to $25,000); 
• Allow catch-up concessional contributions for those with balances less than $500,000;
• Remove regulatory barriers to innovation in the creation of retirement income stream products; 
• Improve integrity of transition to retirement income streams; and
• Remove the anti-detriment provision.

Also included are amendments to provide commensurate treatment for defined benefit and constitutionally protected funds, and some minor amendments to improve the superannuation administration arrangements. 

This release follows the first tranche of exposure draft legislation made available for public consideration on 7 September 2016. A further tranche of exposure draft legislation with the remaining measures will be released in the coming weeks.

The draft explanatory material released with the exposure draft legislation deals with the implementation of these specific measures. The final Explanatory Memorandum that will accompany the Bill will provide the overarching policy context and will include a Statement of Compatibility with the new objective of superannuation.

More information on the Government’s superannuation changes is available on the Treasury website.

Enquiries

For enquiries please call Jessica Carew +61 2 6263 2548 (policy queries) or Phil Bignell +61 2 6263 4372 (law design).

Confidentiality and lodging your submission

Please ensure you have read our information on confidentiality and personal information prior to making a submission.