Currently people who are 60 years of age and over and retired have the ability to reduce their tax to NIL on both the earnings they receive on their superannuation balances and any money they may receive (withdrawals) from their balances.

Recently the Government has announced a range of superannuation reforms to be implemented at 1 July 2014, including:

1.    Earnings on assets supporting income streams (pensions) will be tax free up until $100,000, per person;

2.    Earning greater than $100,000 will be taxed at 15%;

3.    Withdrawals from pensions will still be tax free;

4.    Capital Gains will receive a number of transitional arrangements including:        

4.1. For assets purchased prior to 5 April 2013, capital gains will only be taxed on gains that accrue from 1 July 2024;        

4.2.  For assets purchased from 5 April 2013 to 30 June 2013 only capital gains that accrue after 1 July 2014 will apply.        

4.3.    Assets purchased from 1 July 2014 will have the entire gain assessed;

5.    There will also be changes to the contribution cap and excess contributions.