7 September 2016
Media Release - #2016094, 2016

Superannuation reforms: first tranche of Exposure Drafts

Joint media release with
The Hon Kelly O’Dwyer MP
Minister for Revenue and Financial Services

Today the Turnbull Government has released the first tranche of Exposure Draft legislation for superannuation reforms announced in the 2016-17 Budget.

The reforms will make the superannuation system fairer, more flexible and more sustainable.  The majority of Australians – 96 per cent of individuals with superannuation – will either be better off or unaffected as a result of these changes. Around a quarter of fund members (including many low income earners) will benefit from the Government’s superannuation package.

This tranche of draft legislation will:

  • Enshrine the objective of superannuation in legislation, being to provide income in retirement that substitutes or supplements the age pension, which has guided the development of the Government’s reforms;
  • Improve access to concessional contributions by allowing people (under age 75) to claim a tax deduction for personal superannuation contributions, irrespective of their employment arrangements. This will assist around 800,000 people, particularly benefiting those who are partially self-employed, partially wage and salary earners (for example contractors) and those people whose employers do not offer salary sacrifice arrangements;
  • Provide more flexibility and choice for older Australians, including by removing the restrictions that currently prevent some people aged between 65 and 74 from making voluntary contributions to their superannuation. Around 40,000 older Australians will benefit from this change by having increased flexibility to make additional contributions and to increase their retirement savings from sources not necessarily available to them before retirement, such as proceeds from downsizing their home;
  • Encourage more people to make contributions to the superannuation fund of a low income spouse and;
  • Introduce the Low Income Superannuation Tax Offset (LISTO). Around 3.1 million low income earners will have their superannuation savings boosted by the LISTO, including 1.9 million women. This change will ensure individuals do not pay more tax on their superannuation contributions than on their take-home pay.

The Government has consulted with a range of stakeholders on the objective of superannuation and in the development of legislation to implement the 2016-17 Budget superannuation reforms. This policy was taken to the election. The release of exposure draft legislation and explanatory material on the remaining measures will follow in coming weeks.

The Exposure Draft Bill and Explanatory Memorandum is available on the Treasury website. Submissions will close on Friday September 16.