Date of article: 2005
Last updated: N/A

Superannuation surcharge abolished

The Superannuation Laws Amendment (Abolition of Surcharge) Act 2005 (received royal assent on the 12 August 2005) abolishes the surcharge payable on individuals' surchargeable superannuation contributions, and eligible termination payments from the 2005-06 financial year.

Individuals who make or receive surchargeable superannuation contributions, or who receive employer termination payments from 1 July 2005, will benefit from this measure.

As a result of this measure, from 1 July 2005, the surcharge will no longer apply in respect of superannuation benefits that accrue, contributions made or termination payments received from that date.

The Government said that the abolition of the surcharge will simplify the operation of the superannuation system, boost the superannuation savings of affected individuals, and provide incentives for individuals to make additional voluntary superannuation savings. It also builds on previous changes introduced by the government aimed at assisting Australians to achieve greater financial self-reliance for their retirement.