...fairer and more secure

Superannuation contributions

The Government has cut tax on superannuation contributions for 3.6 million Australians on low and modest incomes, including 2.1 million women. Starting from 1 July last year, the Low Income Superannuation Contribution allows most people with income up to $37,000 to effectively pay no tax on their superannuation contributions by providing a tax cut of up to $500 a year.

The Government has also reduced the tax concession that people with income above $300,000 receive on their super contributions from 30 to 15 per cent. This will ensure their concession is more in line with that received by average income earners.

Excess contributions tax

The Government will make excess contributions tax fairer by taxing excess concessional contributions at a person's marginal tax rate (plus an interest charge) rather than at the top marginal tax rate. It will also give individuals choice by allowing them to withdraw any excess concessional contributions from their super fund.

Retirement phase earnings

The Government will better target the tax exemption for earnings on super assets supporting income streams from 1 July 2014, by limiting it to the first $100,000 of annual earnings for each individual, and taxing earnings above this threshold at the concessional rate of 15 per cent.

Council of Superannuation Custodians

The Government will establish a Council of Superannuation Custodians to ensure that future changes are consistent with an agreed Charter of Superannuation Adequacy and Sustainability.

Deeming rules

To ensure a fairer and more sustainable Age Pension system, the normal deeming rules will apply to new account-based income streams assessed from 1 January 2015. This addresses the current inequity where pensioners with similar levels of financial assets receive different amounts of pension. Products held by pensioners before 1 January 2015 will be grandfathered.