The Federal Government last night presented their Budget to Parliament. The Federal Budget included several changes to the current Superannuation System which can potentially affect your superannuation fund. Below is a summary of these changes.

1.       Reduction of Concessional Contributions for 2009/10 year and onwards.

The Government announced that they will reduce the amount of superannuation contributions that can be claimed as a tax deduction by 50%. These reductions will be effective from 1 July 2009. 

The maximum amount that can be contributed into superannuation and claimed as a tax deduction for the current financial year is:

Under age 50           $50,000

50 years and over     $100,000

For the 2009/10 year the new concessional amounts will be:

Under age 50           $25,000

50 years and over     $50,000

These limits will apply until 30 June 2012.

2.       Pension Drawdown Relief extended.

The Federal Minister for Superannuation and Corporations Law had previously announced a 50% reduction to the minimum pension rules for the 2008/09 year. The Federal Government last night announced that they will be extending these provisions for another 12 months and will apply these provisions for the 2009/10 year as well. The minimum pension rates are summarised as follows: 

Age of member	New rate	Previous Rate
Under age 65	2%	4%
65 to 74	2.5%	5%
75 to 79	3%	6%
80 to 84	3.5%	7%
85 to 89	4.5%	9%
90 to 94	5.5%	11%
95 or more	7%	14%

3.       Reduction to the Government Co Contribution.