Australia Super Fund Changes from May Budget 2016

The Australian budget announched on Tuesday will allow Australians to only contribute  $25,000 a year before tax and $500,000 after tax over the course of a lifetime for their retirement superannuation fund.

The total amount of extra money people can voluntarily put into their super funds (which does not including money they salary-sacrifice) will be capped at $500,000. This was a budget saving measure that will save the Australian government budget $550 million.

The government also announched that it will also disincentize people from accumulating more than $1.6 million in tax-free super accounts. People will either have to withdraw the money from their accounts or transfer it into a separate accumulation account, where these earnings will then be taxed at 15 per cent.

These new transition-to-retirement rules will also change so people who are under the age of 65 who can only access this $1.6 million tax free before they retire. This cap will apply to everyone as well as current retirees.

Sources:
http://www.afr.com/news/policy/budget/budget-2016-super-changes-and-rba-rate-cut-to-drive-property-20160504-golr6g
http://www.smh.com.au/money/super-and-funds/budget-2016-super-strategies-for-the-average-aussie-20160504-golvtz.html
http://www.news.com.au/finance/economy/federal-budget/what-the-2016-federal-budget-means-for-you/news-story/de10ad33395b329e0765e21785abcfce