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| The Government announced that it will permanently set the matching rate for the superannuation co-contribution at 100% and the maximum co-contribution payable on an individual’s eligible personal non-concessional superannuation contributions at $1,000.
As a result, the previously-legislated increase in the matching rate to 125% for 2012-13 and 2013-14 (and 150% for 2014-15 and later years) will not proceed.
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The Government will freeze the indexation applied to the income threshold for which the superannuation co-contribution is paid for 2010-11 and 2011-12.
Under the superannuation co-contribution scheme, the Government provides a matching contribution for contributions made into superannuation out of after-tax income. The matching contribution is up to $1,000 for people with incomes of up to $31,920 in 2009-10 (with the amount available phasing down for incomes up to $61,920). This measure will freeze these thresholds at $31,920 and $61,920 for two years.
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The Government announced that it will seek to make a number of minor amendments to improve the operation of the superannuation legislation. The amendments will include:
- allowing the Commissioner to exercise discretion for the purposes of excess contributions tax before an assessment is issued;
- clarifying the due date of the shortfall interest charge for the purposes of excess contributions tax;
- increasing the time-limit for deductible employer contributions made for former employees;
- permanently allowing a claim for a deduction for eligible contributions to be made to successor superannuation funds;
- providing new arrangements for public sector defined benefit schemes which fund benefits through “last minute contributions”.
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The Government will assist 8.4 million Australians improve their retirement savings by gradually increasing the superannuation guarantee to 12 per cent from 1 July 2013.
It is projected that the superannuation measures will increase the retirement balances for a worker aged 30 now, on full time average weekly earnings, by $108,000; and an individual with broken working patterns by $78,000. These changes will increase Australian superannuation savings by $85 billion over 10 years, and $500 billion by 2035.
By increasing savings, the Government will help address issues raised by our ageing population and build prosperity for Australians.
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From 1 July 2012, the Government will contribute up to $500 for workers with incomes up to $37,000. This means those workers will pay no tax on superannuation guarantee contributions in 2012-13.
The Government will provide new assistance to around 3.5 million low income Australians who currently receive little or no concession from the existing superannuation system.
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