WA Super News

Take 5! Federal Budget 2014

22/05/2014

The 2014 Federal Budget was the first delivered by the Coalition since being elected to form Government in 2013. Many of the announcements made on 13 May 2014 had been rumoured or confirmed in the lead up to this night, but some of the finer detail was finally provided.  

1. Future superannuation guarantee (SG) rate increases

Effective date: 1 July 2014

The Government has proposed to amend the schedule for increasing the SG rate to 12%. The SG rate will rise to 9.5% from 1 July 2014 and will remain at this level until 30 June 2018. The rate of SG will then increase by 0.5% each year from 1 July 2018 until it reaches 12% in the 2022/23 financial year.

Financial year

Superannuation guarantee rate

2013/14

9.25%

2014/15 - 2017/18

Frozen at 9.5%

2018/19

10%

2019/20

10.50%

2020/21

11%

2021/22

11.50%

2022/23

12%

2. Refunding excess non-concessional contributions

Effective date: 1 July 2013

The Government has announced that superannuation members who exceed their non concessional contribution cap will have the ability to withdraw the excess contribution plus any associated earnings without having excess contributions tax levied on the amount. The earnings will be taxed at the individual’s marginal tax rate. If however you choose to retain these within the fund, the contributions will continue to be taxed at the top marginal tax rate.

3. Increasing the Age Pension qualifying age to 70

Effective date: 1 July 2025

Under current legislation the Age Pension qualifying age increases by 6 months every 2 years commencing 1 July 2017 until it reaches age 67 on 1 July 2023. The Government proposes to continue this rate of increase as per the following table until the qualifying age reaches age 70 on 1 July 2035.

What is your age pension age?

Commencement date

Age Pension age

Affects people born

 

65

Born before July 1952

From 1 July 2017

65.5

From 1 July 1952 to 31 December 1953

From 1 July 2019

66

From 1 January 1954 to 30 June 1955

From 1 July 2021

66.5

From 1 July 1955 to 31 December 1956

From 1 July 2023

67

From 1 January 1957 to 30 June 1958

From 1 July 2025

67.5

From 1 July 1958 to 31 December 1959

From 1 July 2027

68

From 1 January 1960 to 30 June 1961

From 1 July 2029

68.5

From 1 July 1961 to 31 December 1962

From 1 July 2031

69

From 1 January 1963 to 30 June 1964

From 1 July 2033

69.5

From 1 July 1964 to 30 December 1965

From 1 July 2035

70

From 1 January 1966 onwards

If you were born before 1 July 1958, you will not be affected by this announcement.

4. Extending the normal deeming rules to new superannuation account-based income streams

Effective date: 1 January 2015 

From 1 January 2015, the normal deeming rules will be extended to superannuation account-based income streams. This will mean all financial assets are assessed under the same rules.

The rules surrounding deeming can be complex. At WA Super we employ fully qualified and experienced financial planners to provide high quality financial advice, help you understand these rules and develop a personal financial plan. 

Contact us and book your appointment now, initial consultation is free. 

5. Repeal of the Low Income Super Contribution (LISC)

Introduced in 2012, the Low Income Super Contribution was a refund of the 15% contributions tax for low income earners. However, as announced in the Federal budget the LISC will be repealed taking into effect on 1 July 2014.

Need more information?

Visit www.budget.gov.au/ for more information.

Source: BT Financial Licensee Select

This information has been prepared and issued by Securitor Financial Group Ltd ABN 48 009 189 495 AFSL and Australian Credit Licence 240687 (Securitor) and is current as at 16 May 2014. The information in this document is of a general nature only and does not take your personal investment objectives, financial situation and needs into account. You should assess whether any advice is appropriate to your individual investment objectives, financial situation and particular needs before making any decisions. You should also consider seeking the assistance of a professional adviser. It is important to note that the policies outlined in this publication are yet to be passed as legislation and therefore may be subject to change or further refinement. The taxation position described in this Federal Budget update 2014 is a general statement and should only be used as a guide. It does not constitute tax advice and is based on current tax laws and their interpretation.

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