Changes in Super Benefits Rates & Thresholds for 2008

The low rate cap amount (which applies to lump super benefits received in the period between preservation age and age 60) – has been increased from $140,000 to $145,000. 

This cap applies to the taxable component of any superannuation lump sum benefit and has the effect of reducing the tax payable on that part of the lump sum under the cap from 16.5% to Nil.   (The cap operates in a different way if the super fund paying the benefit is untaxed or if the taxable component arises from an untaxed source – but these complications are unlikely to apply to the vast majority of self managed superannuation funds).

This cap is a lifetime cap (it does not apply separately to each lump sum received and is not refreshed each year) and the amount of the cap which is available will be determined taking into account previously received lump sum benefits which were subject to the low rate threshold which applied before 1 July 2007.