Australians aged 50 and over will benefit from concessional superannuation contributions with the superannuation guarantee (SG) to be boosted from 9 to 12 per cent, the government announced yesterday.
People aged 50 and over will be able to make $50,000 in annual concessional superannuation contributions if their superannuation balances are below $500,000.
This measure is expected to benefit 275,000 people, according to Treasurer Wayne Swan.
The SG will also be increased to 12 per cent by 2020. The SG will first increase by 0.25 per cent in 2013/14 and 2014/15, followed by 0.5 per cent increments until 2020.
Low-income earners on up to $37,000 will also receive an annual government contribution of up to $500.
This will provide a reward for savings for low-income earners by ensuring no tax is paid on SG contributions, Swan said.
The government will also keep the co-contribution scheme.
The SG age limit will also be raised to age 75 from July 2013, with 33,000 employees expected to benefit from the initiative.
An employee aged 30 today on average weekly earnings will retire with an additional $108,000 in superannuation, according to government estimates.
The government expects the superannuation changes to cost $2.4 billion over the next four years.
Over the next 10 years, $85 billion will be added to Australia's pool of superannuation savings, Swan said.
"As a result of these reforms, 8.4 million Australians will receive an increase in their retirement incomes, including 3.5 million Australians on lower incomes who do not receive tax incentives for saving through superannuation and older workers catching up on their retirement savings," he said.
Post-retirement products will be discussed with key groups in the superannuation sector, according to an industry insider.
