Superannuation: The same but different

Financial planner Shane Gourley reflects on what changes you'll see to your super.

This week's Nest Egg financial column with Shane Gourley. Picture: Contributed

Superannuation Guarantee Rate of 9.5%

Superannuation Guarantee (SG) rules have not changed for the 2016/2017 year.

Under the SG laws, your employer must make compulsory superannuation contributions, and these contributions will increase over time.

The SG laws require an employer to contribute the equivalent of 9.5 per cent of an employee's ordinary time earnings to an employee's super fund, for the 2016/2017 year.

The current annual SG rate of 9.5 per cent remains in place until 30 June 2021, and will increase to 10 per cent for the 2021/2022 year, and gradually increase to 12 per cent from July 2025.

Concessional contribution (Tax Deductible) Caps from 2017

For the 2016/2017 year, the concessional contributions caps have not changed.

If you're aged 48 years or under on 30 June 2016, then your concessional cap is $30,000 for the 2016/2017 year. If you're aged 49 years or over on 30 June 2016, your cap is $35,000 for the financial year. From 1 July 2017, the Coalition government has cut the concessional cap to $25,000 for all age groups.

Co-Contribution Benefit Remains

Making a small non-concessional contribution continues to be compelling for those Australians eligible for the co-contribution scheme.

If your total income is less than $51,021 for the 2016/2017 year, and you make a personal contribution to your super fund, the federal government will make a tax-free co-contribution to your super account.

The federal government will pay you 50 cents for each dollar you contribute to your super fund in after-tax dollars, subject to you also satisfying a work test and assuming you're under the age of 71.

The maximum co-contribution of $500, on a $1,000 after-tax contribution, is payable if your total income is less than $36,021 (for the 2016/2017 year).