The $100,000 pension earnings threshold is going to be indexed to the Consumer Price Index (CPI), and will increase in $10,000 increments.
Clearly, anyone with a high super fund account balance will be affected by this change, either now (if your super account is in pension phase), or later, if you’re still accumulating your super money.
What about capital gains on pension assets that are currently tax-exempt?
According to the federal government, special arrangements apply for capital gains on assets purchased before 1 July 2014, as follows:
For assets purchased before 5 April 2013, the new pension earnings tax will only apply to capital gains that accrue after 1 July 2024. The federal government states that this 10-year timeframe gives retirees an opportunity to decide whether they want to restructure their super assets before July 2024. For assets purchased from 5 April 2013 to 30 June 2014, individuals will have the choice of applying the reform to the entire capital gain, or only that part that accrues after 1 July 2014 For assets purchased from 1 July 2014, the new pension earnings tax will apply to the entire capital gain.
