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Crackdown on super expected in budget

Crackdown on super expected in budget

With the federal government strongly hinting at plans to crack down on superannuation tax incentives in the May 2016 budget, now is the time to be strategic with your nest egg.

Accounting Partner at the BMO Business Centre, Michelle McVeigh said people who were planning to contribute to superannuation during this financial year, might want to consider getting those contributions in as soon as possible.

“Unfortunately we don’t have a crystal ball, but based on comments made by Treasurer Scott Morrison, it’s likely we’ll see changes to contribution eligibility and tax treatment of contributions.

“We are strongly urging everyone who is in a stage of life where they are actively building or accessing their superannuation to seek advice on the best strategies for them.

“For example, current rules allow people from age 56 to initiate a transition to retirement strategy, so for people at this stage of life it would be smart to seek advice on whether you should commence this before budget night.

“We’re expecting that it’s just going to get harder and harder to move large sums of money into super and more difficult for people who are still working to access it.”

The other unknown is the timing of the changes.

“While it’s unlikely that the changes will be retrospective, so people who already have large savings in super should be protected, it’s possible the new rules will come into effect from budget night,” Mrs McVeigh said.

“It’s important not to panic or have a knee-jerk reaction, decisions should be made with advice from your financial planner and accountant, and be tailored to you – not just what everyone else is doing.”

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