Advisers should consider how to maximise client super contributions before July, says Rahul Singh.
With the caps on both concessional and non-concessional super contributions set to fall significantly from July 1, 2017, financial advisers should really think about maximising the current caps while they can.
“If we look forward to July 1, 2017 and onwards, we see a significant reduction in terms of what a client can contribute,” explains Singh, ANZ technical services manager.
In terms of superannuation contributions, he explains that the:
- one-year cap for non-concessional contributions will fall from $180,000 to $100,000 after July 1, 2017
- three-year non-concessional cap (which applies to those eligible for the bringing-forward provisions) will fall as well
- concessional contributions cap will also fall from either $30,000 or $35,000 (depending on the client’s age) to $25,000.
There will also be new restrictions on those whose super balances are approaching $1.6 million. And a new ‘transitional cap’ will apply to those who have triggered the bring-forward provisions in the current or previous financial year but haven’t used it fully.
“Where it’s desirable for our clients to use the higher contribution caps in the current financial year, they should do so before the new reduced caps come in,” Singh says.