Excess contributions tax relief, pension payment relief, hike in SMSF levy, over-50s cap, At a super glance
Dear SuperGuide reader
The newspaper headlines describing last night’s Budget are more about jobs, infrastructure, and mental health, but for those fascinated about super matters, the May 2011 Budget still offers quite a few surprises, and shockers.
SuperGuide’s Federal Budget 2011/2012 (May 2011) SPECIAL EDITION explains some of those super surprises and shockers. If you click on the links at the bottom of this email you can read about the following:
- EXCESS CONTRIBUTIONS TAX: LENIENCY FOR FIRST OFFENDERS. From 1 July 2011, individuals who breach the concessional contributions cap by up to $10,000 can request that these excess contributions be refunded to them. Does this long-awaited announcement smack of ‘too little, too late’? Click on the article link below to find out more.
- WHAT A RELIEF: MINIMUM PENSION PAYMENTS REDUCED BY 25% FOR 2011/2012 YEAR. You can still take advantage of minimum pension drawdown relief, but just not as much relief as in the previous three years. The Federal Government has waved its budgetary wand and deemed that you only have to withdraw 75% of the legislated minimum pension payments. Click on the article link below to find out more
- SMSFs: 20% JUMP IN ATO SUPERVISORY LEVY. The ATO supervisory levy will jump from $150 to $180 from the 2010/2011 lodgement year. Click on the article link below to find out why.
- CONTRIBUTIONS CAP FOR OVER-50s TO BE ‘INDEXED’… IF THAT’S WHAT YOU CALL IT. Yet again the Government has taken the opportunity to announce another ‘not quite right’ policy in relation to superannuation contributions. Click on the article link below to find out more.
- FEDERAL BUDGET MAY 2011: AT A SUPER GLANCE. Read about all of the super-related Budget announcements, including greater use of tax file numbers, and increased focus on companies reneging on Superannuation Guarantee responsibilities
Note: You can click on the links below or you can access the newsletter link directly via the SuperGuide website. Click here if you want to access the MAY 2011 FEDERAL BUDGET SPECIAL edition via the website.
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Trish Power
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Excess contributions tax: Leniency for first offenders
In a conciliatory move to try to redress the worst aspects of the excess contributions tax regime, the Federal Government has announced some concessions for first-time offenders who exceed the super contributions caps by relatively small amounts.
What a relief! Minimum pension payments reduced by 25% for 2011/2012 year
I was hoping that Australians still recovering from the Global Financial Crisis would continue to receive the 50% drawdown relief on account-based pension minimum payments that they had received for the previous 3 years. Alas, the Federal Government announced in the 2011 Federal Budget that it is now phasing out the relief, albeit gradually.
SMSFs: 20% jump in ATO supervisory levy
In December 2010, I wrote that hidden in the Federal Government’s response to the Cooper Review was a recommendation that self-managed super funds be hit with a higher supervisory levy, effective from the 2010/2011 year. Well, in the May 2011 Federal Budget, the Government has delivered on this recommendation by announcing a 20% hike in the SMSF ATO supervisory levy.
Contributions cap for over-50s to be ‘indexed’… if that’s what you call it.
Yet again the Government has taken the opportunity to announce another ‘not quite right’ policy in relation to superannuation, as part of the 2011 Federal Budget. The over-50s concessional contributions cap is to be ‘indexed’ rather than having it remain at $50,000 for perpetuity as was originally intended when the Government announced the policy last year (as part of its response to the Henry Tax Review).
Federal Budget May 2011: At a super glance
On 10 May 2011, Federal Treasurer Mr Wayne Swan released the 2011/2012 Federal Budget. Although Mr Swan promoted the package of documents as delivering jobs and spreading the benefits of the mining boom to more Australians, the May 2011 Budget also delivered several superannuation measures.
