The concessional contribution cap is currently indexed each 1 July, in $5,000 increments. The Government has announced that they will pause this annual indexation until 1 July 2014. This means the standard cap for individuals under age 50 will remain at $25,000 for the 2013 and 2014 financial years, with a potential increase to $30,000 on 1 July 2014.

As the concessional contribution cap is the base for calculating the non-concessional contribution cap, this means there will also be no indexation of the non-concessional cap until 1 July 2014.

The Government has also announced that it is committed to undertaking further consultation with industry in relation to its proposal to retain the concessional contribution cap at $50,000. This limit was proposed for individuals age 50 or over with less than $500,000 in super. Watch this space for further updates.

Increase in the Superannuation Guarantee rate

Currently before the Senate , the Superannuation Guarantee (Administration) Amendment Bill 2011 will see the rate of superannuation guarantee gradually increase, commencing on 1 July 2013.

The new rates are as follows:

Year Ended                                                       SG Rate %

30 June 2014                                                       9.25

30 June 2015                                                       9.50

30 June 2016                                                       10.00

30 June 2017                                                       10.50

30 June 2018                                                       11.00

30 June 2019                                                       11.50

30 June 2020 and onwards                              12.00

If you wish to know further information, contact Donna Lovegrove – donnalovegrove@kmwaccountants.com