The Government confirmed each of its pre-Budget announcements
with one exception, which was announced before the Budget. In
response to industry concerns regarding compliance costs, the
Government will not be going ahead with the proposal to limit the
higher cap on concessional contributions to super account balances
below $500,000. So, when the higher general concessional cap of
$35,000 comes in (around 2018), it will apply to all going
forward.
Of particular interest to life companies and retirees is the
Government's proposal to exempt from tax the assets held by
life companies to fund deferred lifetime annuities. By doing so,
the Government will provide these products with the same tax
concessions as other super pensions. This is a significant change
towards making these types of retirement products more attractive
to retirees. These products are purchased with an upfront payment
(or premium) but the income stream is not paid until a later date.
For example, the
