Over 60s win - again

I will let the dust settle on the Government's Response to the Henry Review.  But I will make the initial observation that the winners (again) at least from a superannuation perspective are those over 60.

Take this scenario: I am a superannuation fund member with an account balance of $750,000.  I want to maximise concessional contributions (through salary sacrifice arrangements).  Depending on my age after 1 July 2012, the outcomes are quite different:

• if I'm under 55 I am stuck with the $25,000 cap on concessional contributions.
• if I'm 55 to 59, I could retire to trigger a condition of release, and could then take out $250,001. I would be taxed on this amount.  I would then qualify for the higher $50,000 concessional contribution cap - but given that I had to cease gainful employment with the intention of not returning to work, I might have some difficulty convincing the ATO that I'd had a genuine change of heart.  I could then recontribute the net amount as a non-concessional (assuming the bring forward of the non-concessional caps was available).
• if I'm 60 to 64 I will need to cease gainful employment.  I could take $250,001 tax free, and recontribute it as a non-concessional (again assuming the bring forward was available).  I can immediately return to work and qualify for the $50,000 concessional contribution cap.
• if I'm 65 to 74, I simply need to satisfy work test - which shouldn't be difficult if I'm looking to make salary sacrifice contributions.  My major difficulty is that I can't access the bring forward provisions.

We still need to see the detail of this proposal - it's not clear at what point the member balance needs to be under $500,000, and whether this could be repeated in future years (assuming the non-concessional cap bring forward isn't completely exhausted).

But even as a one-off it may be worth considering.