Technical

Big opportunity in super contribution changes

October 2017

Changes to concessional and non-concessional contribution caps creates opportunity – ANZ technical services manager Mark Gleeson.

One of the most significant changes to superannuation from July 1, 2017 is that both the concessional as well as non-concessional contributions caps have been greatly reduced.

In terms of changes to the concessional contributions cap, Gleeson explains that from July 1, 2017, the concessional contributions cap is now $25,000 for everyone, regardless of a client’s age.

This reduction may impact clients who currently salary sacrifice to their super in order to fund their premiums.

The non-concessional contributions cap changes include reduction in:

  • the one-year non-concessional cap, from $180,000 to $100,000.
  • the three-year non-concessional cap, from $540,000 to $300,000.

It’s also important to remember that your non-concessional contributions cap is tied to how much you’ve got in super at that time, so the more you’ve got in super the lower your cap, Gleeson adds.

However, the changes have created an opportunity for both clients and advisers.

“Most clients can make personal deductible contributions to super. What that means is that if they’re funding insurance through super, they’ve got flexibility in how they fund their premium.”