The federal government has cut by half the amount some Australians can save in superannuation through salary sacrificing and has reduced its contribution to lower income earners who choose to save more.
“The government will reduce the generosity of some superannuation concessions for those with greater private wealth,” Treasurer Wayne Swan said on Tuesday as he handed down the federal government’s 2009/10 budget.
“The cap on concessional super contributions will be lowered and the matching rate of the superannuation co-contribution will be reduced temporarily.”
The cap on concessional super contributions for people aged under 50 will be reduced to $25,000 from $50,000, the budget documents said.
The cap for those aged 50 and over, which was an interim measure to make up for the fact that they hadn’t participated in the super scheme for as long, would be reduced to $50,000 from $100,000 up to the 2011/12 financial year.
The concessional contributions allows employees to salary sacrifice, avoiding the normal income tax rates of 30 per cent or more, and put the money into their super scheme, which is taxed at 15 per cent.
The government will also reduce the super co-contribution matching rate to 100 per cent from 150 per cent, for lower income earners for the next two financial years. The rate will rise to 125 per cent for 2012/13 and the year after that.
Up to this financial year, the government had contributed up to $1,500 to those who put an extra $1,000 after tax into their super scheme. The maximum contribution for the next two years would now be $1,000.