The current limit of $50,000 on before-tax (concessional) contributions for individuals over age 50 is proposed to continue from 1 July 2012, but only if the individual’s account balance is less than $500,000. The concessional contributions limit for individuals under age 50 will continue to be $25,000, which will also be the limit for individuals over age 50 with account balances greater than $500,000.
Concessional contributions are contributions made by employers, including salary sacrifice contributions.
The Federal Government has also announced that it proposes to halve the matching rate and maximum payment of the superannuation co-contribution.
Currently the Government matches dollar-for-dollar personal super contributions up to $1,000 made by individuals who earn $31,920 per annum or less. The co-contribution reduces by 3.33 cents for every dollar if the individual’s total income exceeds $31,920, up to $61,920 per annum.
From 1 July 2012, the Government intends to match only 50% of personal contributions up to a maximum of $500. This means that individuals would move to make a personal contribution of $1,000 to get the $500 co-contribution from the Government. The co-contribution would phase down to zero once assessable income reaches $46,920 per annum.