A $1.6 million cap on the amount of tax-free super savings a person can hold in retirement has been passed by the federal government. This new ruling is to begin July 2018, and after-tax contributions are also to be capped at $100,000 a year. Treasurer Scott Morison is calling the changed the “most significant change to protect the flexibility and ensure the sustainability of superannuation in more than a decade.” The originally proposed $500,000 lifetime cap on after-tax super contribution made since 2007 saw severe backlash from Coalition backbenchers resulting in the countered response of $100,000 cap. Whilst the changes were mostly welcomed by superannuation groups there were complaints that the Government had caved in to the super rich. This Government, however, views the change as a necessity in order to sustain a flexible superannuation policy for future generations. The changes will allow for more than 800,000 Australians to take advantage of their concessional contributions cap from July next year.
