2014/15 Key Superannuation Rates and Thresholds

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1 2014/15 Key Superannuation Rates and Thresholds These are the key rates and thresholds that apply in relation to superannuation contributions and benefits, superannuation guarantee and co-contributions. CONTRIBUTION CAPS Concessional contributions cap Concessional contributions include employer contributions (including contributions made under a salary sacrifice arrangement) and personal contributions claimed as a tax deduction by a self-employed person. Amount of cap $30,000 * $25,000 * $25,000 In accordance with section of the Income Tax Assessment Act 1997 (ITAA 1997), the concessional contributions cap is indexed in line with average weekly ordinary time earnings (AWOTE), in increments of $5,000 (rounded down). The new indexed amount is generally available each February. Indexation of the general concessional contributions cap has been paused at $25,000 up to and including the year. Normal indexation resumes for the year. * People aged 59 years or over on 30 June 2013, and 49 years or over on 30 June 2014 The concessional contributions cap will be temporarily increased to $35,000 for the: financial year if you are aged 59 years or over on 30 June financial year or a later financial year if you are aged 49 years or over on the last day of the previous financial year. The temporary higher cap is not indexed and will cease when the general concessional contributions cap is indexed to $35,000. Non-concessional contributions cap Non-concessional contributions include personal contributions for which you do not claim an income tax deduction. Amount of cap $180, $150, $150,000 (Note the bring-forward option available, meaning that people under 65 years of age can make nonconcessional contributions of up to three times their non-concessional cap over a three-year period.)

2 CGT Under the CGT cap, you can only exclude up to the CGT in non-concessional super contributions from the non-concessional contributions cap during your lifetime. The CGT cap applies to all excluded CGT contributions, whether they were made between 10 May 2006 and 30 June 2007 or after 30 June Amount $1.355 million $1.315 million $1.255 million Note: In accordance with section of the ITAA 1997, the CGT is indexed in line with AWOTE, in increments of $5,000 (rounded down). Division 293 tax threshold From 1 July 2012, Division 293 tax will be applied to certain super contributions to reduce the concessional tax treatment of those contributions made for very high income individuals. The high income threshold is $300,000. An individual's income is added to certain super contributions and compared to the high income threshold. Division 293 tax is payable on the excess over the threshold, or on the super contributions, whichever is less. The rate of Division 293 tax is 15%. Division 293 tax is not payable on excess concessional contributions that have been taxed under Division 292 (or refunded under section ). SUPERANNUATION BENEFITS Low rate The application of the low rate threshold for superannuation lump sum payments is capped. The low rate is reduced by any amount previously applied to the low rate threshold. Cap amount $185, $180, $175,000 Note: In accordance with section of the ITAA 1997, the low rate is indexed in line with AWOTE, in increments of $5,000 (rounded down).

3 Untaxed The untaxed limits the concessional tax treatment of benefits that have not been subject to contributions tax in a superannuation fund. The untaxed applies to each superannuation plan from which a person receives superannuation lump sum member benefits. amount $1.355 million $1.315 million $1.255 million Note: In accordance with section of the ITAA 1997, the untaxed is indexed in line with AWOTE, in increments of $5,000 (rounded down). Minimum annual payments for superannuation income streams Once you start a pension on or after 1 July 2007, a minimum amount is required to be paid each year. There is no maximum amount other than the balance of your super account. The Government has phased out the pension drawdown relief that was provided. Minimum payment amounts for account-based, allocated and market linked pensions will be reduced by 25% for and returned to normal in The following table shows minimum percentage factor for each age group: Age Percentage of account Balance 2012/ / /2015 Under % 4.00% 4.00% % 5.00% 5.00% % 6.00% 6.00% % 7.00% 7.00% % 9.00% 9.00% % 11.00% 11.00% 95 or more 10.50% 14.00% 14.00% * The reduction in the minimum payment amounts applies to account-based annuities and pensions, allocated annuities and pensions, and market-linked annuities and pensions. Preservation Age Generally, you must reach before you can access your super. Use the following table to work out your. Date of birth Preservation age Before 1 July July June July June July June July June From 1 July

4 Super Lump Sum Tax Table Income component derived in the income year Member benefit taxable component taxed element Member benefit taxable component untaxed element Death benefit lump sum benefit paid to non-dependants taxable component taxed element Death benefit lump sum benefit paid to non-dependants taxable component untaxed element Death benefit lump sum benefit paid to dependants taxable component taxed and untaxed elements Rollover superannuation benefits taxable component taxed element Rollover superannuation benefits taxable component untaxed element Superannuation lump sum benefits less than $200 Age at the date payment is received Under At or above Aged 60 and above Under At or above Aged 60 and above Amount subject to Tax Whole amount 21.5% Amount up to the low rate Amount above the low rate Whole amount Amount up to untaxed plan Amount above untaxed plan Amount up to the low rate Amount above the low rate and up to the untaxed Amount above the untaxed Amount up to the untaxed Amount above the untaxed Nil Maximum rate of Tax (including Medicare levy) 16.5% Nil 31.5% 16.5% 31.5% 16.5% Any Whole Amount 16.5% Any Whole Amount 31.5% Any None Nil Any Whole Amount Nil Any Amount up to the untaxed Amount above the untaxed Any None Nil Nil

5 Super Income Stream Tax Tables Taxed Element in the fund of a superannuation income stream The table below summarises the taxation of a superannuation income stream paid with a taxed element in the fund in 2014/15. The tax free component is not included. This component is not assessable income and not exempt income in all cases. Age of recipient Age 60 and over At or above Under Income stream Not assessable, not exempt income Taxed at marginal tax rates Tax offset of 15% is available Taxed at marginal tax rates, with no tax offset Tax offset of 15% is available if a disability superannuation benefit Note: Medicare levy (1.5%) is added to whichever rate of tax applies. Untaxed Element in the fund of a superannuation income stream The table below summarises the taxation of a superannuation member income stream paid with an untaxed element in the fund in 2014/15. The tax free component is not included. This component is not assessable income and not exempt income in all cases. Age of recipient Age 60 and over At or above Under Income stream Taxed at marginal rates, with a 10% tax offset Taxed at marginal rates, with no tax offset Taxed at marginal rates, with no tax offset Note: Medicare levy (1.5%) is added to whichever rate of tax applies.

6 SUPERANNUATION GUARANTEE The superannuation guarantee charge percentage (%) The superannuation guarantee requires employers to provide sufficient superannuation support for their employees. You are obliged to contribute a minimum of 9.5% of an eligible employee s earnings base to a complying superannuation fund or retirement savings account (RSA) during Your contributions need to be made at least every quarter. The charge percentage is set out in the law. This rate will increase over the next 5 years in accordance with the table below Period Super Guarantee Rate % % % % % % % and onwards 12% Maximum superannuation contribution base The maximum superannuation contribution base is used to determine the maximum limit on any individual employee's earnings base for each quarter of any financial year. You do not have to provide the minimum support for the part of earnings above this limit. Per quarter $49, $48, $45, $43, $42, $40, $38, $36, $35, $33, $32, $30, $29,220 Note: In accordance with section 9 of the Superannuation Guarantee (Administration) Act 1992, the maximum superannuation contributions base is indexed in line with AWOTE each income year.

7 SUPER CO-CONTRIBUTION The Super Co-contribution is a helping hand from the Australian Government to assist eligible individuals to save for their retirement. If you are eligible and make personal super contributions, the government will match your contribution with a Super Co-contribution up to certain limits. Co-contribution income thresholds Year Maximum Entitlement Lower Income Threshold $500 $34,488 $49, $500 $33,516 $48, $500 $31,920 $46, $1,000 $31,920 $61, $1,000 $31,920 $61, $1,000 $31,920 $61, $1,500 $30,342 $60, $1,500 $28,980 $58, $1,500 $28,000 $58, $1,500 $28,000 $58, $1,500 $28,000 $58, $1,000 $27,500 $40,000 Higher Income Threshold