It has been proposed that from the 2010 financial year onwards the annual superannuation deduction limits would be halved from 2009 levels and then indexed annually.
If passed/legislated this would mean;
- Individuals under age 50 could only make concessional (tax deductible) contributionstotalling $25,000 per year (indexed);
- Individuals over age 50 would have their transitional concessional cap reduced to $50,000 (not indexed)for the financial years between and including 2010 – 2012 (then revert to the above).
These caps include all compulsory 9% employer contributions as well as any before tax salary sacrifice amounts made by employees and is the limit of tax deductible contributions for self employed persons.
These changes may seriously reduce the amount of tax deductible contributions that can be made leading up to your retirement. If you are an employee who is salary sacrificing (before tax) into superannuation you should review your situation to ensure that your total concessional contributions do not breach these amounts, on an annual basis, IF these rules become law.
Further information on these proposed changes, including the proposed changes to the Government Co-Contribution can be viewed here.