New rules governing superannuation in Australia have come into force allowing people with low balances to top up their savings at the concessional taxation rate.
Minister for Revenue and Financial Services, Kelly O’Dwyer said the new “catch-up carry forward” measure would empower individuals with less than $500,000 in their accounts to catch up on their retirement savings by accessing unused portions of their concessional contributions cap.
“These unused portions can be carried forward for five years to enable extra contributions from 2019–20 onwards where people have the financial capacity to do so,” Ms O’Dwyer said.
She said this would give individuals, especially women, more control over their superannuation savings.
“This measure recognises the reality of modern careers,” Ms O’Dwyer said.
“It will be of particular assistance to people who are absent from the workforce because of illness or injury, caring responsibilities or to undertake further study.”
She said it would also make it easier for those with interrupted work patterns to save for retirement and benefit from the tax concessions commensurate with individuals who have a regular income.
Ms O’Dwyer said introducing the catch-up carry forward measure completed the implementation of the suite of measures included in the 2016–17 Budget to improve the fairness and flexibility of Australia’s superannuation system.
The Minister said it complemented the existing superannuation co-contribution scheme, which matched after-tax contributions of low income earners at a rate of 50 per cent up to $500.
