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The Turnbull government has made significant changes to its superannuation reform package, including scrapping controversial plans for a lifetime cap of $500,000 on non-concessional contributions.
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Controversial super tax measure dumped
15 September 2016
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This move is in line with extensive speculation that the reform would be on the chopping block, given the reported backlash against the cap from within the Liberal Party and the opposition from Liberal party faithfuls.
To date, the proposal had already been significantly modified, with exemptions for personal injury payouts and for those with limited recourse borrowing arrangements (LRBAs) underway before budget night.
Federal Treasurer Scott Morrison had also paved the way for divorce settlements to be exempt from the cap.
There were also significant concerns that accurate records of taxpayers' non-concessional contributions would not be able to be obtained from the ATO, despite a new portal released at the end of August for tax agents.
Fairfax Media is reporting that the cap has been replaced by a mechanism in which people would be able to make both concessional and non-concessional contributions until the cap of $1.6 million in a super retirement account is reached.
Further, there will be a yearly cap of $100,000 on non-concessional contributions until the $1.6 million is reached.
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