Tax free withdrawals from age 60 remain unchanged.
From 1 July 2014 the tax exemption applying to pension account earnings will be limited to $100,000 per individual with 15% tax applying on any excess. This cap will be indexed by the CPI in $10,000 increments. Similar arrangements will impact defined benefit funds.
Special arrangements will apply for capital gains on assets purchased before 1 July 2014,
The $25,000 concessional contribution cap remains but it increases to $35,000 (unindexed) for individuals aged 60 and over from 1 July 2013 and aged 50 and over from 1 July 2014.
- The previous consideration to limit the higher cap to individuals with balances below $500,000 has been dropped.
- Excess concessional contributions from 1 July 2013 can be withdrawn from the fund and taxed at marginal rates plus an interest component rather than retained in the fund and taxed at the highest marginal rate.
- From 1 January 2015 all new account based super pensions will be assessed as income for income test purposes rather than benefit from a reduction based on the capital component. All existing pensions at that date will be grandfathered.