The Federal Government’s changes to the superannuation tax system has come into effect, ensuring that low income individuals on less than $37,000 per year effectively pay no tax on their contributions.

 

"For example if you work a day or two and week and therefore earn up to $37,000 a year, you will now see the 15 percent tax you used to pay on your superannuation abolished. Less tax on your super contributions means more money steadily building up for a secure retirement,” Minister for Superannuation Bill Shorten said.

 

The measure, known as the Low Income Superannuation Contribution, is funded by the Federal Government’s Minerals Resource Rent Tax, which came into effect at the beginning of the month.

 

As a result of this reform, the superannuation savings of low paid Australians will be boosted by almost $1 billion a year,” Mr Shorten said.

 

"That's $1 billion every year which instead of being taken in tax, is going straight into the nest eggs of everyday Australians to help them secure their retirement."

 

The 3.6 million Australians who will benefit from this reform includes:

  • Around 1.1 million workers in NSW
  • Around 910,000 workers in Victoria
  • Around 800,000 workers in Queensland
  • Around 260,000 workers in South Australia
  • Around 360,000 workers in WA
  • Around 90,000 workers in Tasmania
  • Around 30,000 workers in the NT
  • Around 50,000 workers in the ACT