While the reduced superannuation contribution caps will remain unchanged for 2018-19, other important super thresholds have been increased for 2018-19 in line with the latest indexation factors published by the Bureau of Statistics.
Thomson Reuters Weekly Tax Bulletin has reported that the CGT cap amount for non-concessional contributions will increase to $1.480m for 2018-19 (up from $1.445m for 2017-18).
The concessional contributions cap will remain unchanged at $25,000 for 2018-19. This cap was reset in the legislation at $25,000 from 2017-18 as part of the super reforms that reduced the contribution caps. As the concessional cap is now only indexed in $2,500 increments, the average weekly ordinary time earnings (AWOTE) indexation factor of 1.024 for 2018-19 was insufficient to trigger an increase to $27,500. At this current rate of wages growth, the concessional cap is not expected to increase to $27,500 until 2023.
The non-concessional contributions cap (which is set at 4 times the concessional cap) is unchanged at $100,000 for 2018-19 (or $300,000 under the bring-forward rule over 3 years, subject to transitional rules).
While the super guarantee is frozen at 9.5% until 1 July 2021, the “maximum contribution base” will rise to $54,030 per quarter from 2018-19 (up from $52,760 for 2017-18). An employer is not required to provide the minimum super guarantee support for that part of an employee’s ordinary time earnings (OTE) above the quarterly maximum contribution base (ie $54,030 for 2018-19). This quarterly maximum represents a per annum equivalent of $216,120 for 2018-19.
The Government co-contribution “lower income threshold” is set to increase to $37,697 for 2018-19, while the “higher income threshold” is $52,697.
The superannuation lump sum low rate cap and “ETP cap” will increase to $205,000 for 2018-19 (up from $200,000), while the untaxed plan cap will increase to $1.480m. The tax-free amount for a genuine redundancy will increase to $10,399 (base amount) for 2018-19 plus $5,200 for each whole year of service.
The general transfer balance cap will remain at $1.6m for 2018-19 (unchanged from 2017-18). This also means that the “defined benefit income cap” of $100,000 pa is unchanged for 2018-19 (being the general transfer balance cap divided by 16). The general transfer balance cap is indexed to CPI in $100,000 increments. With CPI running at only 1.9% for the year to December 2017, the first adjustment of the general transfer balance cap to $1.7m is unlikely to occur until 2022.
For everything super related, see our Superannuation and Financial Services Bulletin.