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News Bulletin : ADA News Bulletin November 2010
22 NOVEMBER 2010 The Federal Government has announced a number of proposed changes to Superannuation in the 2010/2011 Federal Budget. CHANGES EMPLOYERS NEED TO BE AWARE OF SUPERANNUATION GUARANTEE INCREASE FROM 9% TO 12% Beginning on 1 July 2013, the Superannuation Guarantee (SG) will gradually increase from its current level of 9%, reaching 12% on 1 July 2019. The table below shows the scheduled increases: Date New SG amount Current 9.00% 1 July 2013 9.25% 1 July 2014 9.50% 1 July 2015 10.00% 1 July 2016 10.50% 1 July 2017 11.00% 1 July 2018 11.50% 1 July 2019 12.00% EXTENDING SG TO WORKING AUSTRALIANS AGED 70TO75 Workers aged 70 to 75 will be eligible for SG contributions. Currently, the SG is not compulsory for those aged 70 and over who are still working. From 1 July 2013, the age of eligibility will increase to 75 years of age. Previously, workers over the age of 69 missed out on SG contributions; therefore, older workers effectively took a pay cut. Employers can make voluntary deductible superannuation contributions for employees under 75, and self-employed people can make deductible contributions until they turn 75. CHANGES EMPLOYEES NEED TO BE AWARE OF TAX REFUND IN THE FORM OF GOVERNMENT SUPERANNUATION From 1 July 2012, the Federal Government will make an annual contribution of up to $500 each year to an individual's superannuation account, where the individual's adjusted taxable income is less than $37,000. The exact amount is calculated by working out how much contributions tax is payable on the actual Superannuation Guarantee contribution, and then refunding this amount as a payment to the individual's super account. DOUBLING THE CONCESSIONAL CONTRIBUTIONS CAP FOR OVER 50S The current $50,000 superannuation concessional contributions cap for individuals aged 50 or over is a transitional cap scheduled to expire from 1 July 2012. It was supposed to revert to $25,000; however, the Government wanted to create the opportunity for mature Australians to 'catch up' with their super contributions. Under this measure, from 1 July 2012, the $50,000 cap will be extended permanently for individuals aged 50 or over provided that their superannuation balance is less than $500,000. This means that individuals aged 50 or over with total a superannuation balance of less than $500,000 can continue to make up to $50,000 per year in superannuation concessional contributions. This will allow these individuals to catch up on their superannuation contributions, for example, women who have broken work patterns. Please note that these are only proposed changes and have not received royal assent. This means that they are not yet law. Before acting on any of the information in the above article, please contact the friendly team at the ADA HR Advisory Service on: Phone: 1300 ADA INC (1300 232 462) Fax: 02 9993 9709 Email: firstname.lastname@example.org The ADA HR Advisory Service is available from 8:30 am -- 5:00 pm AEST Monday to Friday. 'The answer could be just a phone call away' PROPOSED CHANGES to superannuation guarantee
ADA News Bulletin October 2010
ADA News Bulletin December 2010