This proposal has three components. 

Component 1: Superannuation tax structure 

This component would alter the taxation of superannuation by: 

• making contributions to, and earnings in, superannuation accounts tax free
• making all withdrawals from superannuation accounts taxable at the individual's marginal income tax rate
  • A tax credit would be available to offset tax on withdrawals equal to the value of tax previously paid on contributions and earnings.
• removing all caps that currently apply to superannuation contributions.

Component 2: Tax-free withdrawals from superannuation 

This component would also allow pre-retirement access, and tax-free withdrawals, for: 

• medical expenses, including goods and services currently subsidised by the Government, goods and services provided in private hospitals that are also provided in public hospitals, and health insurance premiums currently covered by the Private Health Insurance rebate
• unemployed or disabled individuals, up to the level of the median wage per unemployed or disabled person
• income insurance premiums where an account holder or their dependants are unemployed or disabled, up to the greater of the person's previous income and the median wage.

Component 3: Government payment changes 

This component would cease payments of Youth Allowance (Job Seeker), Newstart Allowance, and the Disability Support Pension, for recipients with a positive superannuation balance. 

This proposal would have effect from 1 July 2017.