May 2018 Budget - Superannuation 09 May 2018

Blog / SMSF

Superannuation work test exemption for retirees
Effective 1 July 2019

The Government intends to amend the superannuation contribution rules to allow people aged 65 to 74 that have a total superannuation balance of under $300,000 to make voluntary contributions for 12 months from the end of the financial year they last satisfied the work test. This will give people more time to make contributions to super after they have retired and finished working.

For example, if a person retired on 30 March 2020, they would be able to make voluntary concessional and/or non-concessional contributions during the 2020-21 financial year where their total superannuation balance was under $300,000 on 30 June 2020. In this case, the normal contribution caps will apply, including the ability to make additional contributions under the catch-up
concessional contribution rules.


SMSF membership increasing to six
Effective 1 July 2019

The Government will amend the definition of Self-Managed Superannuation Funds (SMSFs) in the SIS Act to increase the maximum number of members in new and existing funds from four to six.

This change is also proposed to apply to Small APRA Funds from the same date.


Three year audit cycle for some SMSFs
Effective 1 July 2019

The Government will allow certain SMSFs to move from an annual to a three-yearly audit cycle where they have:
three consecutive years of clear audit reports, and
lodged the fund’s annual returns in a timely manner.


Preventing inadvertent concessional cap breaches
Effective 1 July 2018

The Government will allow individuals whose income exceeds $263,157 and who have multiple employers to nominate that their wages from certain employers are not subject to the superannuation guarantee (SG).

The government says this measure is being introduced to allow eligible individuals to avoid unintentionally breaching the $25,000 annual concessional contributions cap as a result of multiple compulsory SG contributions. In this case, the employee will be able to negotiate to receive additional salary and wages to make up for the lost SG contributions.


Personal deductible contribution notice of intent integrity changes
Effective 1 July 2018

The ATO will modify income tax returns to require individuals to confirm they have provided a valid notice of intent to their fund when claiming a tax deduction for their personal contributions. The ATO will also provide guidance to individuals on how to comply if they have not yet done so.

The Government says this measure will ensure that any deductible contributions are appropriately taxed by superannuation funds and enable the ATO to deny deductions to individuals who do not comply with the NOI requirements.


Changes to insurance in superannuation
Effective 1 July 2019

The Government will change the insurance arrangements for certain categories of superannuation members. Insurance within superannuation will move from a default framework to be offered on an opt-in basis for the following groups of members:

  • low balances of less than $6,000
  • under the age of 25 years
  • whose accounts have not received a contribution in 13 months and are inactive.
The government says these changes are required to protect the retirement savings of young people and those with low balances by ensuring their superannuation is not unnecessarily eroded by premiums on insurance policies they do not need or are not aware of. The government also says the changes will reduce the incidence of duplicate cover.

Impacted members will have approximately 14 months from budget night to decide whether they will opt-in to the existing cover or allow it to switch-off.


Capping fees, banning exit fees and reuniting small and inactive superannuation accounts
Effective 1 July 2019

The Government has announced it will introduce a 3% annual cap on passive fees charged by superannuation funds on accounts with balances below $6,000 and will ban exit fees on all superannuation accounts.

The Government also announced it will require all inactive superannuation accounts with balances below $6,000 to be transferred to the ATO. The ATO will then use data matching to proactively reunite these inactive accounts with a member’s active account, where possible.



SMSF can seem complex.  We have a special offer for general advice for $225.00.
Please click here for more information.
For more information on this subject feel free to get in touch with us click here
To receive free updates on relevant information click here
To read more about our specialised service offers for SMSF please click here

 
Disclaimer and Warning
The information above is of a general nature only.  It should not be used as a source to make financial decisions.  It's also important to note that the legislation and figures related to this topic tend to change regularly and therefore the information above may not reflect the current status.  We recommend that if you are looking for advice on this matter, you should contact
us.

 


Recent News Aged-Care Financial-Planning SMSF Special-Disability-Trusts May 2018 Budget - Superannuation
SOLOMON FORMAN SMSF SPECIALIST ADVISOR SMSF SPECIALIST AUDITOR Forman Financial Services SOLOMON FORMAN CERTIFIED FINANCIAL PLANNERĀ® Forman Financial Services
 
© Forman Financial Services 2014. Design & Developed by maxmoment interactive