Superannuation Law Update

From 1 July 2007:

• A person who meets the current definition of retirement in Reg 6.01(7), who is 60 or over, will not pay any tax on either lump sum benefits or pension benefits. >A person under 60 who retires will pay tax at the current rates. There will be some modification to simplify the tax treatment of the components.

• The low rate threshold (currently $129,751) for lump sum payments under 60 will continue.

• RBLs are to be abolished.

• The transition to retirement pensions will remain with modification as to the maximum amount that can be taken – 10% of the account balance each year.

• Contribution rules are to be simplified. A maximum contribution of $50,000 per annum at the concessional contributions tax rate of 15% will apply regardless of age. There will also be full deductibility for the self-employed. Transitional rules are to apply for persons over 50 who will be able to make contributions of a maximum $100,000 per annum at the