The new superannuation changes take effect from 1 July 2017 and for members of some defined benefit superannuation schemes these changes are significant.
For members of the Commonwealth Superannuation Scheme (CSS) and the Public Sector Superannuation (PSS) Scheme things are about to change significantly, and for the worse. Currently the unfunded portion of employer contributions to the CSS and PSS for contributing members are ignored for the purpose of determining their Concessional Contribution Cap, but that is about to change!
From 1 July 2017 a notional employer contribution for CSS and PSS members will be reported to the Australian Taxation Office and with the associated reduction in the annual Concessional Contribution Cap to $25,000, salary sacrifice contributions may need to be scaled back significantly.
For members of the CSS and PSS, the calculation to determine the maximum amount that can be salary sacrificed to superannuation is about to become more complicated. CSS and PSS members who are currently maximising their salary sacrifice entitlements will also need to account for the fact that their last payday for this financial year falls on 29 June 17. There is therefore a real risk that the last salary sacrifice payment from this financial year may be received by their superannuation after 30 June and count towards next year’s concessional contribution cap of $25,000.
With all of this complexity, isn’t it great to know that our business, The Financial Advice Shop, has experts available to help you make sense of all this and can provide assistance where required. If you feel you might benefit from a Financial Advice Health Check in preparation for the latest round of superannuation changes that commence on 1 July 2017, contact us without delay.
In a complex world, there has never been a better time to contact us to see how your financial situation could be improved.