Speaking at Tax Institute event in Sydney last week, Ms O’Dwyer said the government is aware that certain individuals will be affected by the proposed changes to superannuation in the budget and plans to consult extensively on all legislation that it brings in prior to implementation.
The government she said has a clear commitment to that, particularly given that it is a “significant reform package”.
“We know that there will be some people who will be caught by the changes, and we need to make sure where there are unintended consequences, that we are able to properly deal with those in the legislation,” she said.
“We have taken a very conscious decision to exempt structured settlements and court orders for personal injury payments from both the $1.6 million transfer cap, and with the lifetime [$500,000] non-concessional cap,” added Ms O’Dwyer.
Ms O’Dwyer said this was important as these sorts of payments were very important for people who have high health costs, and daily needs.
“That’s just one example I can give you,” she said.
Last week, KPMG director Ross Stephens suggested this would be the case, noting he sees “no reason” why the carve out will not continue if the lifetime cap comes into effect.
Ms O’Dwyer argued that the coalition’s reforms for superannuation overall will make the superannuation system “fairer for women and older Australians” and disputed the argument that the changes are retrospective.
“The government’s changes are all prospective, the government’s changes on the $1.6 transfer balance cap, apply prospectively from the first of July 2017, and on the $500,000 non-concessional lifetime cap,” she said.
“We have made it very, very clear, that those people that contributed money after tax into superannuation before Budget night, are completely grandfathered.”
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I agree with the patriot. Ms O’Dwyer seems to be confused about the meanings of “grandfathered” and “retrospective”. I would also suggest that a pension in place before budget night should be allowed to continue as is regardless of the balance (grandfathered). The budget announcement would appear to say this is not the case and is to be limited to $1.6M regardless of when it was commenced (retrospective). But then according to a certain past government, a “levy” is not a “tax” so it is not surprising that this government is rewriting the dictionary as well.
If the Minister believes there is no retrospectivity in the proposals, then she is not fit for office.
“completely grandfathered” is untrue – if you reached your $500k cap before budget night, you have no options left for post tax contributions without severe penalty…whereas a completely grandfathered view would mean that after 1 July 2016 the max contribution a member could make going forwards would be $500k. Just a small difference….really, this government has alienated more voters then Rudd did…pathetic for a Liberal/National thinker…or maybe they are not that anymore under Turnbull?