Federal Budget Wrap 2018-19
|Work test exemption for voluntary contributions to superannuation for recent retirees||Introduces an exemption for retirees from the work test for voluntary contributions to superannuation from 1 July 2019. Applies to people aged 65 to 74, with super balances below $300,000, in the first year that they do not meet the work test requirements.
Currently, the work test restricts the ability to make voluntary superannuation contributions for those aged 65 to 74 to individuals who self report as working a minimum of 40 hours in any 30 day period in the financial year.
|Capping passive fees, banning exit fees and reuniting small and inactive superannuation accounts||Introduces a 3% annual cap on passive fees charged by super funds on accounts with balances below $6,000 and will ban exit fees on all super accounts.
Strengthens ATO's consolidation regime by requiring the transfer of all inactive super accounts where the balances are below $6,000 to the ATO.
These changes will take effect from 1 July 2019.
|Changes to insurance in superannuation||From 1 July 2019, insurance arrangements within superannuation will change from a default framework to an opt-in basis for:
The Government will also consult publicly on methods to improve the current policy settings to better balance priorities of retirement savings and insurance cover within super.
|Better integrity over deductions for personal contributions||Improves the integrity of the 'notice of intent' (NOI) processes for claiming personal super contribution tax deductions to prevent individuals from claiming a tax deduction without having submitted an NOI, as is required.
Enables the ATO to develop a new compliance model and to undertake additional compliance and debt collection activities.
|Increasing the maximum number of members in SMSFs and small APRA funds||Increases the maximum number of allowable members in new and existing SMSFs and small APRA funds from four to six, from 1 July 2019.|
|Preventing inadvertent concessional cap breaches by certain employees||Allows individuals whose income exceeds $263,157 and have multiple employers to nominate that their wages from certain employers are not subject to the superannuation guarantee (SG) from 1 July 2018, which will enable individuals to avoid unintentionally breaching the $25,000 pa concessional contributions cap.|
|Three-yearly audit cycle for some SMSFs||Changes the annual audit requirement to a three-yearly requirement for SMSFs, with a history of good record keeping and compliance.
This measure will start on 1 July 2019 and, to ensure smooth implementation, the Government will consult with stakeholders.
|Comprehensive income products in retirement (CIPR)||Amends the Superannuation Industry (Supervision) Act 1993 to introduce a retirement covenant that will require superannuation trustees to formulate a retirement income strategy for superannuation fund members.
Will also amend the Corporations Act 2001 to introduce a requirement for providers of retirement income products to report simplified, standardised metrics in product disclosure to assist customer decision making.
The Government did not disclose a commencement date for these changes.
Last modified: Wednesday, May 1, 2019