Super Changes from 30 June 2007

The superannuation system changed on 1 July 2007. The changes mean most people will receive more from their super, and most employers and fund managers will find super easier to administer.

The ATO has outlined below the key changes to super which will help you make the most of your retirement savings.

You can also find out how the changes may affect you if you are working.

  • Super benefits are tax-free if paid from a taxed source and you are 60 or over.
  • Make sure your super fund has your tax file number. If it doesn’t you may be charged a higher tax on contributions and your fund may not accept some types of contributions.
  • If your only income is your super from a taxed source and you are 60 or over, then you may not need to complete an income tax return from the financial year ending 30 June 2008
  • You can make contributions to your super until you turn 75 as long as you work at least 40 hours in 30 consecutive days in the financial year.
  • You can keep your savings in super indefinitely, there are no compulsory cashing out rules.
  • If you choose to draw on your fund, your super pension must pay a minimum amount based on your age and your account balance.
  • Employment termination payments cannot be rolled over into super.
  • Your employer can claim a tax deduction for before-tax contributions until you turn 75.
  • Rules about your preservation age have not changed.
  • Transition to retirement income stream payments in a year must be less than 10% of your super account balance (at the beginning of the financial year).
  • You can not take a lump sum payment under transition to retirement.
  • There are changes to the government pension asset test taper rate, effective 20 September 2007, which mean you could be eligible for Government pensions such as the Age Pension.

    D Maynard
    CEO My Tax Zone

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