OPTING OUT OF SUPER GUARANTEE WITH CERTAIN EMPLOYERS – PROPOSED
In the 2018/19 Federal Budget, the Government announced individuals whose income exceeds $263,157 and who have multiple employers will be able 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.
FIRST HOME SUPER SAVER SCHEME: ABILITY TO RELEASE AMOUNTS – LEGISLATED
From 1 July 2018, amounts can be released from superannuation under the First Home Super Saver Scheme.
Clients may apply to the ATO for a determination of their ‘maximum release amount’ which includes voluntary personal non-concessional, personal tax-deductible and salary sacrifice contributions from 1 July 2017.
DOWNSIZER SUPER CONTRIBUTIONS – LEGISLATED
From 1 July 2018, clients age 65 or over may be eligible to make downsizer contributions from the proceeds of selling their main residence, up to $300,000.
This measure applies to contributions from the proceeds of contracts exchanged on or after 1 July 2018.
Contributions must be made within 90 days of the change of ownership of the main residence.
PRESERVATION AGE INCREASES TO AGE 57 – LEGISLATED
For 2018/19, clients born between 1 July 1961 and 30 June 1962 will meet preservation age when they reach age 57.
Preservation age impacts a number of important superannuation strategies including:
- Retirement condition of release
- Ability to commence a transition to retirement income stream
- Severe financial hardship condition of release
- Taxation of superannuation withdrawals – low rate cap of $205,000 applies to withdrawals between preservation age and 60
- Taxation of superannuation income streams – 15% tax offset applies to income stream payments between preservation age and age 60
- Splitting contributions – members spouse must be under preservation age at the time of the split, or if between preservation age and 65 must declare they do not satisfy the retirement condition of release.
CARRY FORWARD CONCESSIONAL CONTRIBUTIONS – LEGISLATED
Clients with a total superannuation balance below $500,000 can carry forward any unused concessional contributions cap amounts that accrue from 1 July 2018 onwards, for up to five financial years.
This allows eligible clients who do not use all of their concessional cap in a particular financial year, to carry forward their unused concessional cap amounts to future years.
Effectively, this means a client cannot access a higher cap than the general concessional contributions cap until 1 July 2019 at the earliest.
SMSF TBAR REPORTING – LEGISLATED
From 1 July 2018, all SMSFs must report events that affect their members’ transfer balances. Timeframes for reporting are determined by the total superannuation balances of the SMSF’s members:
- Where all members of the SMSF have a total superannuation balance of less than $1 million, the SMSF can report this information when its annual return is due, or
- SMSFs that have any members with a total superannuation balance of $1 million or more must report events within 28 days after the end of the quarter in which the event occurs.
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