Key takeaways
- Superannuation rules change regularly, through both indexation and new legislation.
- Announced or proposed measures are not law until passed, and details can change.
- Contribution caps and the transfer balance cap move with indexation.
- Check whether a change is law and when it starts before acting on it.
Superannuation is one of the more frequently changed areas of Australian law. Some changes are routine, such as annual indexation of caps. Others are major policy shifts that take years to legislate. The key skill for trustees is telling the difference between what is law and what is merely proposed.
Proposed is not the same as law
Governments announce measures in budgets and policy statements, but an announcement is not the law. A proposal can change substantially as it passes through parliament, or not become law at all. Acting on a proposal as though it were settled is risky, so always check the status before making a decision based on a change.
What changes regularly
- Contribution caps. The concessional and non-concessional caps are indexed and step up over time.
- The transfer balance cap. The cap on tax-free retirement-phase super is indexed.
- Preservation age and conditions of release, which have already moved to age 60 for everyone.
- Pension minimum drawdown rates, which the government has at times reduced temporarily.
Larger proposed changes
From time to time, more significant measures are proposed, such as additional tax on the earnings of very large super balances. Measures like these attract a lot of commentary well before they are settled law, and the detail, including thresholds and start dates, can shift. Treat them as something to monitor and plan around, not to act on prematurely.
How to handle change
The practical approach is to confirm the current rules with the ATO before relying on any figure or measure, and to lean on your adviser to interpret what a change means for your fund specifically. We keep clients informed of changes that affect them, and flag clearly what is law versus what is still proposed.
Frequently asked questions
- How often do super rules change?
- Regularly. Some changes are routine, such as the annual indexation of contribution caps and the transfer balance cap. Others are major policy shifts that take years to legislate and may change along the way.
- Is a proposed super change something I should act on?
- Be careful. An announced or proposed measure is not law until passed, and the detail, including thresholds and start dates, can change. Confirm a change is law and when it starts before making decisions based on it.
- How do I know which super figures apply this year?
- Check the current figures on the ATO website, since caps and the transfer balance cap are indexed and change between years. Your accountant or adviser can confirm what applies to your fund.
