We hope this note finds you well.
It has been a very busy start to the year with changes to the Age Pension Asset Test taking effect on the 1st January 2017. The changes mean that an estimated 91,000 part pensioners have lost their Age Pension benefits and about 235,000 part-pensioner payments have been reduced. If you have been impacted and need assistance to restructure assets or replace that income, please do not hesitate to contact us to look at your situation.
Last year, the Federal Budget initiated some of the most significant changes to superannuation in almost a decade. On 1 July 2017, new contributions rules will take effect and limit the amount you can contribute into your super and may also affect those drawing a pension in retirement.
By way of summary, you will not be able to put as much money into super as you can right now, where:
- From 1 July 2017, the Non-Concessional Contribution Cap (NCC) will be lowered by almost 45% from $180,000 to $100,000 per annum.
- Once the new rules take effect on 1 July 2017, and if your total super balance exceeds $1.6 million, no further NCCs can be made.
- The new transfer balance cap of $1.6 million will limit the amount transferrable from accumulation super into a tax-exempt retirement pension.
- From the 1 July 2017, the Concessional Contribution Cap (CC) will be lowered to $25,000 for everyone.
- Transition to Retirement pensions (TtR) will now be taxed on their investment earnings.
To better understand these changes, we will be running a series of boardroom briefings throughout May and June to discuss the changes in depth and what strategies you may need to consider now before these changes take effect. If we believe you may benefit by attending, we will send you an invitation in the mail. Also, if you know of anyone that you feel may be impacted by these changes they are welcome to contact us to secure their seat at the briefing.
Finally, it has been a long time coming, however we are about to release our new website and it will be online by the end of March. The new website will be full of informative articles and it has a client only area which will give you access to our premium material. It will also enable us to deliver information to you in a much more streamlined manner should you wish to communicate with us in that way. The website address is www.mfmgroup.com.au and we would appreciate any feedback you may have regarding its usability or content you would like to see.
We hope you enjoy this monthâs edition of the newsletter, and if you have any questions regarding the changes outlined above, or any questions relating to your situation, please do not hesitate to contact us.
Gary, Garry & Maurice and the team
