2016-17 Superannuation Reform Changes in New Budget

Following the new budget effective from 7.30pm 3rd May 2016, following changes have been made in relation to Superannuation;

1. New lifetime cap for non-concessional superannuation contributions – Effective 3rd May 2016 7.30PM

The government will introduce a $500,000 lifetime non-concessional contributions cap.

The lifetime cap will take into account all non-concessional contributions made on or after 1 July 2007 and will be indexed in $50,000 increments in line with average weekly ordinary time earnings.

If an individual has exceeded the cap prior to 7.30pm on 3rd May 2016, they will be taken to have used up their lifetime cap but will not be required to take the excess out of the super. However, if an individual has exceeded the cap after 7.30pm on 3rd May 2016, they will be notified by the ATO and must withdraw excess or will be subject to penalty tax.

Please note that the new lifetime cap will replace the existing non-concessional contributions cap, which allow non-concessional contributions of up to $180,000 per year.

2. Allow Catch-up concessional superannuation contributions – Effective from 1st July 2017

From 1st of July 2017, individuals with a super balance of less than $500,000 will be able to make additional concessional contributions where they have not reached their concessional contributions cap in previous years.

Only unused amounts accrued from 1st July 2017 can be carried forward and can only be carried forward on a rolling basis for a period of five consecutive years.

3. Transition to Retirement Income Stream – Removal of tax exemption – Effective from 1st July 2017

From 1 July 2017, tax exemption on earnings of Transition to Retirement Income Stream assets will be removed. The earnings on TRIS asset will be taxed at 15%. This change is proposed to apply irrespective of when the TRIS commenced and therefore the new rule will apply to all existing TRIS.

4. $1.6 Million Pension Cap – Effective from 1st July 2017.

From 1st of July 2017, $1.6 million “superannuation transfer balance cap” will be introduced. Subsequent earnings on this pension balance will not be restricted.
The cap will index in $100,000 increments in line with the consumer price index and a proportionate method will apply to determine the percentage of the cap space an individual has available at any point in time (e.g if an individual has previously used up 75% of their cap they will have access to 25% of the current(indexed) cap.

Please note that, subsequent fluctuations in the pension balance due to earnings growth or pension payments are not considered when calculating cap space.
If an individual has more than $1.6 million in a pension, they can transfer the excess to accumulation phase where earnings are taxed at 15%.
An individual already in pension phase with balances over $1.6 million will be required to reduce the balance by 1st July 2017.

5. Reduced Concessional Contributions Cap – Effective 1st July 2017

From 1 July 2017, annual concessional contributions cap will be reduced to $25,000.

6. Removal of “Work Test” for members aged 65 to 74 – Effective 1st July 2017

Current requirement of members aged 65 to 74 having to satisfy “Work Test” to be able to make super contributions will be removed.

7. Tax Deductions for Personal Super Contributions – Effective 1st July 2017

The government will allow all individuals under age 75 to claim an income tax deduction for personal superannuation contributions. The current requirement to satisfy 10% income test will be removed.
Please note that the Concessional Contribution Cap from 1st of July 2017 will be $25,000. This means if an individual’s employer has contributed $10,000, the employee is able to make further $15,000 into super and claim it as deduction in their personal return.
However, individuals that are members of certain prescribed funds would not be entitled to deduct contributions to those schemes (prescribed funds include all untaxed funds, all Commonwealth defined benefit schemes, and certain defined benefit schemes that choose to be prescribed.)

8. Division 293 Changes – Effective 1st July 2017

Division 293 threshold has been reduced from $300,000 to $250,000.

9. Removal of the anti-detriment provision in respect of death benefits – Effective 1st July 2017

Anti-Detriment provision will be removed from 1st July 2017.

10. Removal of election to treat pension payments as lump-sum payments. – Effective 1st July 2017

The government will remove the rule that allows individuals to treat certain superannuation pension payments as lump-sums for tax purposes (which currently makes them tax-free up to the low rate cap of $195,000).

Disclaimer: This information should not be considered personal financial advice as it is intended to provide general advice only. This factsheet has been prepared by Superhelp Australia Pty Ltd without taking into account your personal objectives, financial situations or needs.

The information contained in the factsheet may not be appropriate to your individual needs therefore you should seek personal financial advice before making any financial or investment decisions.

Book Your Free SMSF Consultation

Book your free consultation with me to find out if SMSF is right for you. If you have any other questions, we are happy to help!


Sandra - SMSF Advisor

4 + 11 =

Why is SMSF Set up so affordable at SuperHelp?

SuperHelp has been servicing the SMSF market for over 15 years. We pride ourselves on being able to provide an affordable SMSF service without compromising on quality. One of these services is to provide new members with setting up their SMSF at an affordable fee when they use our award winning service.

Do I need to use a specific bank, broker or provider?

Unlike other SMSF administrators and accountants we do not restrict you to what bank, broker or service provider you use. We are independent and do not take any commissions from other parties so that our clients can invest their super where they please.

How long has SuperHelp been around for?

SuperHelp have been around since 2002 - so over 15 years! While new SMSF administrators have come and gone, we are still around!

Do you offer any other SMSF services?

Yes we do! You can see a full list of SMSF services on our services page.

How much do you need to retire in Australia?

Retiring in Australia can be a dream come true, but it's important to have a clear understanding of how much money you will need to support yourself during your golden years. The amount you need to retire in Australia depends on several factors, including your...

SMSF Director ID

The SMSF (Self-Managed Super Fund) Director ID is a unique identifier that is assigned to individuals who act as directors of SMSFs. This identifier is used to monitor and regulate SMSF trustees and ensure that they are fulfilling their obligations under the...

What types of people have an SMSF?

There are many different types of people who have an SMSF. Some of the most common include: Small business owners: Many small business owners choose to set up an SMSF to help manage and invest their retirement savings. This allows them to have more control over their...

Commercial SMSF Loans – What you need to know

Securing a commercial loan for an SMSF can be complex due to the variety of lenders and options available. Whether you're a first-time borrower or an experienced borrower, it's important to understand the nuances of the loan process when applying for a commercial SMSF...

Is SMSF right for you?

Before deciding to set up an SMSF, it is important to consider whether it is the right choice for you. An SMSF is a type of superannuation fund that is run by its members, who are also the trustees. This means that the members have complete control over the investment...

How to Complete Your SMSF Tax Return

SMSF trustees are responsible for managing their own superannuation funds, which means they are also responsible for ensuring that their SMSF complies with all the relevant laws and regulations. One of the most important compliance requirements for SMSFs is the...

Understanding Loan Rules and Regulations For SMSFs

Self-Managed Super Funds (SMSF) are a popular way for Australians to save for their retirement. However, many SMSF trustees are not aware that they can also use their fund to borrow money to invest in property or other assets. This type of borrowing is known as a...

The Step by Step Guide to Setting Up a Self-Managed Super Fund

Setting up a self-managed super fund (SMSF) can be a complex process, but it can also be a great way to take control of your retirement savings and invest in a wider range of assets. Here is a step-by-step guide to setting up an SMSF, along with some important things...

How Often Should a Self-Managed Super Fund Value Its Property?

Self-managed super funds (SMSFs) are becoming increasingly popular among Australians as a way to save for retirement. One of the key features of SMSFs is the ability to invest in a wide range of assets, including property. However, with this flexibility comes a...


Due to the economic fallout and market volatility created by the Coronavirus, the Australian Government and the ATO have each separately announced various measures designed to help retirees navigate this new financial landscape. Some law changes made by Government...

Contact Us

SuperHelp is located in Macquarie Park, NSW however we work with clients all around Australia.


1300 736 453

PO Box 1906 Macquarie Centre NSW 2113

M-F: 9am-5pm, S-S: Closed

10 + 13 =