Introduction
If you have a super fund, you should read this article.
From 1 July 2007, Superannuation changes will be implemented across Australia. Whether you watch television or not, you will have had a difficult time trying to avoid the government propaganda associated with the super changes.
Simply put, the changes encourage individuals to deposit money into their super at an early stage to provide for their future. Individuals are then rewarded with a reduction in tax payments in late life. This of course, is necessary due to our ageing population. The super changes will increase retirement incomes, simplify the taxation of super, give more flexibility and choice in how super can be accessed and improve incentives to work and save.
In brief, the changes are as follows:
- no tax on your super payout if you are in a taxed super fund (that's most workers) and over 60.
- self-employed people will be able to claim all their super contributions as a tax deduction.
- If over 60 and want to work part-time you will be able to take part of your super as regular income - tax-free - and use it to top up your take-home pay.
- Easier to combine multiple super accounts into one fund.
Changes explained
Tax-free super payouts from age 60: From 1 July 2007, over 60 will enjoy paying absolutely no tax on their super payout.
Whether takes as a lump sum or as a superannuation pension, there is nothing to pay. It won’t even have to be declared come tax time.
Lower tax on payouts from untaxed super from age 60: If you have untaxed contributions (mainly public servants) you will still be taxed on your payouts, because until they are paid out, they are untaxed. However, the tax will be lower.
More flexibility and choice in how you take your super payout: Until now, there have been strict rules about how and when payouts are taken. For example, once aged 65 and were no longer working, you used to have to take out all your super – there was no choie.
Not so anymore - From 1 July 2007, you can take some of your super out (if you are 65 plus) - as a lump sum or as a pension - and leave some in to continue making money. Or you can work part-time and keep adding to it.
A better pension deal for people with assets: Under the old rules, people with modest assets lose access to all or part of government pension payments.
From 20 September 2007, the rate at which your Age Pension is reduced because of the value of your assets will be halved.
This means that many people will receive more money. Some of them because they will become eligible for a pension for the first time, while some current part-pensioners will have their payments increased.
Self-employed? From 1 July 2007, you are able to claim a full tax deduction for your super contributions.
You may also be eligible for the Government Super Co-contribution scheme if you make after-tax contributions.
Easier to find and transfer super from different jobs: If you have a number of super accounts from different jobs, we recommend you put them into one fund. That process has now been simplified so that all you have to do is fill in one form and send it to the super fund of your choice.
Additionally, if you have ‘lost’ money, it will be easier to find using the government service.
Other improvements
There are many other Better Super changes. For example, Reasonable Benefits Limits have been abolished, and there's more flexibility if you want to continue working and making contributions until you're older.
Most of these additional changes only apply to a small proportion of people, so they are not covered in detail here. | 
