The superannuation contributions caps are not subject to indexation for 2017-18 given that they have been reset for this period by the superannuation reform legislation. However, several other existing rates and thresholds have been increased for 2017-18 in line with the latest movements in average weekly ordinary time earnings (AWOTE) reported by the Bureau of Statistics.
Thomson Reuters Weekly Tax Bulletin (Issue 8, 24 February 2017) has reported that the CGT cap amount for non-concessional contributions will increase to $1.445m for 2017-18 (up from $1.415m).
As noted above, the contributions caps will not be indexed for 2017-18. Instead, the concessional contributions cap has been reset in the legislation at $25,000 for all taxpayers from 2017-18. This $25,000 cap will be indexed in future years in multiples of $2,500 (down from $5,000). As the concessional cap will only increase in $2,500 increments from 2017-18, it will take a 10% increase in wages (starting from December 2016) before the concessional cap will increase to $27,500. Given that AWOTE wages growth has stagnated to 2.2% in 2016, an increase in the concessional cap to $27,500 is not expected until 2023.
For 2016-17, the concessional cap is $30,000 (or $35,000 for those aged 49 years or over on 30 June 2016).
The non-concessional contributions cap (which is set at 4 times the concessional cap from 2017-18) is $100,000 for 2017-18 (or $300,000 under the bring-forward rule over 3 years, subject to transitional rules). For 2016-17, the non-concessional cap is $180,000 (or $540,000 over 3 years). Details on these measures are explained in Thomson Reuters Australian Tax Handbook 2017.
While the super guarantee is frozen at 9.5% until 1 July 2021, the “maximum contribution base” will rise to $52,760 per quarter from 2017-18 (up from $51,620 for 2016-17). 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 $52,760 for 2017-18). This quarterly maximum represents a per annum equivalent of $211,040 for 2017-18.
The Government co-contribution “lower income threshold” is set to increase to $36,813 for 2017-18, while the “higher income threshold” is $51,813.
The superannuation lump sum low rate cap and “ETP cap amount” are $200,000 for 2017-18 (up from $195,000), while the untaxed plan cap will increase to $1.445m. The tax-free amount for a genuine redundancy will increase to $10,155 (base amount) plus $5,078 for each whole year of service.