Superannuation benefits paid from a taxed superannuation fund will be not be taxed for people aged 60 or over. This applies to both lump sums and pensions.

Benefits paid from untaxed superannuation schemes (generally public service schemes) will continue to be taxed but at a lower rate.

Reasonable benefit limits (RBLs) will be abolished.

Greater flexibility for individuals to draw on their superannuation in retirement. There will no longer be any forced payment of superannuation benefits.

That is, retirees will not be forced to start using their superannuation after they have ceased working or after they have reached age 75.

Age based annual contribution limits will be abolished and replaced by a flat $50,000 per year limit. Transitional arrangements will allow individuals over 50 to contribute up to $100,000 per year until 30 June 2012.

Undeducted, or after tax, contributions will be capped at $150,000 per year. There will be provision to bring forward the annual limit so up to $450,000 can be contributed in any three year period. A transitional limit of one million dollars applies from 9 May 2006 (Budget night) to 30 June 2007.

The self-employed will be able to claim a full deduction for their superannuation contributions as well as be eligible for the Government co-contribution for their personal contributions.

The 50 per cent assets test exemption for the aged pension will be abolished. However, the asset test taper rate will be halved to $1.50 per fortnight from 20 September 2007.