Concessional contributors to withdraw excess without penalty

PEOPLE who make concessional contributions to their superannuation funds will be able to withdraw excess deposits without penalty from July this year.

Workplace Relations Minister Bill Shorten introduced a bill for new changes to superannuation in parliament on Wednesday.

The changes will also mean lower income earners who inadvertently breach the concessional contributions cap will be charged at their tax rate.

Previously, all such breaches of the cap were taxed at the highest marginal tax rate, which disadvantaged those with lower incomes.

If passed, the changes would mean the concessional contribution cap would be set at $25,000 for most Australia, and set at $35,000 for those over 60 from July.

The changes will also see those aged older than 50 get the same $35,000 cap on concessional contributions.

Government figures estimated the reform would reduce tax liability for about 40,000 Australians next financial year, by about $1100 each.

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