Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Register

11 November 2026

Home / 174

10 quick points on super reform for dummies

  •   22 September 2016
  • 2
  •      
  •   

This is a quick snapshot of the proposed superannuation changes announced by the Government (as at Friday 16 September 2016, that is).

  1. The Government is legislating an objective of superannuation against which all changes will be measured. Broadly, the primary objective of super will be to supplement or replace the age pension. This objective has some problems, including that super funds currently pay out on events unrelated to pensions, they pay out lump sums and they pay money to beneficiaries other than the superannuation fund member.
  2. Income on account balances paying a pension up to maximum of $1.6 million will be tax-exempt. Any income from assets above that will be taxed in a fund at 15% or the excess can be taken out.
  3. If taxable income is above $250,000 pa, the tax rate is 30% on contributions to a super fund, not the usual 15%.
  4. Non concessional contributions will be capped at $100,000 pa or $300,000 over any three-year period before age 65, and once there is $1.6 million in a fund, no more non-concessional contributions can be made.
  5. If income is less than $37,000 pa the Government will refund the contribution tax to the fund.
  6. Employees can receive a deduction for up to $25,000 pa of contributions less what their employer has contributed.
  7. One spouse can contribute up to $3000 to the other spouse’s super account whose income is less than $40,000, and the first spouse gets an 18% tax offset on what they have contributed.
  8. Income on deferred annuities will be tax exempt.
  9. Extra payments made by funds on the death of a member will not be tax deductible.
  10. Fund income supporting a pension while a person is working will be taxable at 15% not 0%.

All these changes commence from 1 July 2017 so get cracking!

 

Gordon Mackenzie is a Senior Lecturer in taxation and superannuation law at the Australian School of Business, University of New South Wales. This article is a brief summary of the major points, it does not consider the needs of any individual and does not summarise all aspects of the proposals, which have yet to be legislated.

 

  •   22 September 2016
  • 2
  •      
  •   
2 Comments
PPayne
September 22, 2016

6.Employees can receive a deduction for up to $25,000 pa of contributions less what their employer has contributed

Can someone speak on our behalf.
If you are over 50 years the limit for Concessional Contributions was $35000. (This is excluding the 9.5% employers super SGC guarantee). Please can this be re-instated. It has been reduced to $25000 for everyone (including >50 years).
This is the time when you can build a bit more I your super and it is not fair to target this group.

Ben
September 28, 2016

Yes this is not smart in my opinion, lowering the amount to $25,000, when interest rates are so low and likely future returns even on the stock market will be low. Only public servants with their assured tax payer funded defined pension schemes would let this get proposed. Ivory towers in Canberra!

The elderly are usually advised to keep a solid proportion of their income producing assets in fixed interest not shares/stocks. With Aust 10 year Gov bond under 2% that means $500,000 will yield $10,000 annually. This will likely result in more people needing more pensions from the taxpayer not less.

If people put more into shares, and there's a significant crash/drop what will this mean? How many could cash out at the worst time?

Meddling with the world famous super scheme Australia introduced is unwise. Anyway in our view Aust Gov.s in the future will not have enough money as in other welfare dependent and demographically challenged developed countries and the private Super monies will be even more attractive for treasury to 'raise money' from. Beware.

 

Leave a Comment:

RELATED ARTICLES

Testamentary trusts survived the trust tax. The drafting battle has just begun.

Testamentary trusts have secured the CGT exemption

Meg on SMSFs: How wide is the ban on LRBAs?

Firstlinks is sponsored by:
banner

Most viewed in recent weeks

Division 296: the initial moves to make before the windows close

What if the best superannuation strategy isn't about earning more, but acting before your options disappear? Several overlooked planning windows are narrowing, with consequences that can last for decades.

The retirement scorecard: how many of these questions can you answer?

From the maths of retirement, estimating spending and picking the right asset allocation to survive a poor decade, here are the questions every retiree – current or future – should be able to answer for themselves.

Testamentary trusts: Treasury has picked the wrong reading

A decades-old estate planning tool has survived one tax crackdown only to be caught by another. The surprise isn't who the reform is targeting, but who could end up paying the price for drafting choices made years ago.

Superannuation’s structural failings

Politicians are fighting over access to super, but they may be arguing about the wrong thing. The system’s three fundamental flaws have been hiding in plain sight for decades, costing Australians far more than they realise.

Avoid unnecessary CGT with this estate planning clause

A simple estate plan can create a ticking time bomb. One overlooked clause can pit spouses against children, delay inheritances, and potentially leave a family facing an unexpected tax bill worth hundreds of thousands of dollars.

Higher yields are creating opportunities in global bonds

Bond markets are adjusting to a new reality, but not in the ways investors expect. With markets repricing and capital competing for attention, investors may need to rethink where resilience and opportunity lie. 

Latest Updates

Superannuation

Superannuation’s structural failings

Politicians are fighting over access to super, but they may be arguing about the wrong thing. The system’s three fundamental flaws have been hiding in plain sight for decades, costing Australians far more than they realise.

Planning

The great wealth transfer myth

Why do some families preserve wealth for generations while others struggle to? As the great wealth transfer unfolds, the determining factor is often not the structure of the estate, but the preparation of those who will inherit it.

Investment strategies

What comes after bank hybrids?

For years, bank hybrids have been a cornerstone of portfolio income. With tens of billions of dollars now disappearing from the market, investors face a critical question: what comes next, and are the obvious replacements enough?

Investment insights from the US

What happens when knowledge becomes a commodity? The latest themes emerging from the US tech sector suggest AI could reshape company moats, disrupt incumbents and create winners and losers in unexpected places.

Investing

Can Berkshire thrive without Buffett?

Warren Buffett's departure marks the end of an era. But the more important question for investors is whether Berkshire's culture, discipline and capital allocation framework can survive without the man who built them.

Retirement

The Bengen 4% Rule: Lost in translation

For years, retirees have been told to focus on withdrawal rates. But the real question is far simpler: how many dollars can you safely spend? The answer may be very different from what conventional retirement wisdom suggests.

Interest rates

Super low interest rates came with side effects

For more than a decade, investors lived through an era of near-zero interest rates. With bond yields now surging, it's worth asking whether cheap money solved economic problems, or introduced a much larger set of risks.

Sponsors

Alliances

  • ASA-Logo-RGB-ActiveGreen-web.png

Site Map

About Firstlinks

© 2026 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.