Australian superannuation changesPosted on September 5, 2014
First it was the budget, and then, courtesy of China’s best friend, Clive Palmer, there has been yet another round of tweaks and changes to Australia’s Superannuation system. So what has gone on, and where are we now?
The following table displays the before and after changes amended within the policy with its effects illustrated below each change.
Increase in the pension age to encourage employees to work longer.
- In practice, many people will not be able to work that long
- Possible rise to a time gap between retirement and pension age
- Born 01/01/1996 (currently aged 48) requires $96,423 to generate maximum age pension
The increase in the Non-concessional combined amount of $540,000 can be contributed in a particular year is good news for Australians living and working overseas. It means you can save a larger amount offshore from your earnings, and then contribute that to your superannuation when you home. Keep in mind that this is a 3 year limit so the following two years cannot be used for any extra contributions.
Planned cap rate for superannuation guarantee delayed by 7 years.
The estimate is that the government saves $10 Billion over a number of years in income tax that it didn’t forgo due to the changes although it does mean that around $128 Billion less in contributions will be made. It does mean, when you head home you can throw a bit more of your savings into Superannuation. You also won’t be facing an automatic 12% contribution, so that is something to keep in mind. But while you are an expatriate, you are saving 9-12% of your monthly income each month to ensure you maximize the lump you can put into Super when you are return, aren’t you?
About Caterer Goodman Partners
Caterer Goodman Partners is a Shanghai based wealth management firm established with a clear vision to provide a new level of personalized financial planning services for expatriates in Asia. Our financial advisors provide guidance for our clients in all areas of investment, specialising in managed accounts, money-market funds, retirement planning and alternative investments. At Caterer Goodman Partners, we offer our advice and experience to provide low cost, tax-effective and simple solutions to match our clients’ interests.
About Owen Caterer
Since graduation Mr Owen Caterer has worked with the Queensland Premier's Department in Trade Facilitation and then as a financial adviser in Shanghai from 2005 until 2010. He then rose to Senior Adviser, then Business Development manager and then to Chief Investment Officer responsible for portfolios to a value of US$280 million across Asia. Following that Mr Caterer left to found his own firm with a partner in the financial advisory and wealth management area. This focused on developing China and Asia's first fee-based financial advisory (rather than commission-based). This has grown to now have 8 staff and and managing almost US$35 million for clients throughout Asia. This business success was recognized as a finalist in the 2013 ACBA in the Start Up Enterprises category and are one of a small number of foreign managed firms to have a full asset management license in China. Owen has also been active in the community volunteering for the Australian Chamber of Commerce in Shanghai and acting as the Vice-Chair of the Small Business Working Group (2012-2014) and as the Co-Deputy Chair of the Financial Services since 2013 until the present. They have continued to grow their business and have now been selected as a small group of companies who are platinum members of the Australian chamber of commerce. The achievement they are most proud of is their efforts to reform the financial planning industry in China and push it away from a hard-sales commission driven model to a more ethical management fee and long term customer service model. Owen has a Graduate Diploma of Applied Finance from the Securities Institute of Australia of which he was a member as a Fellow of Finance for many years and also has an undergraduate degree from Griffith University in International Business. Owen's interests are tennis, running and his wife and two children. He speaks fluent Chinese, first arriving in China in 1997.
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