As super provides a concessionally taxed investment environment, these changes make superannuation an extremely tax-effective retirement savings vehicle with concessions on contributions, earnings and on the final benefit payment.
Additionally, the compulsory payments rule was abolished, so people over 65 are allowed to keep some or all of their benefit in their super fund, creating greater flexibility around where money is kept in retirement.
Making contributions is easier to understand, since contribution rules were streamlined with the introduction of caps on contributions before and after tax. Under the Better Super rules, before-tax (or concessional) contributions are capped at $50,000 a year. Once these caps are reached, contributions can still be made, but they are heavily taxed.
