2018/19 Federal Budget Highlights – Superannuation
The Treasurer announced a number of changes relative to superannuation as follows:
- Increase in membership
New and existing Self-Managed Superannuation Funds (SMSFs) and small APRA Funds will be allowed to have a maximum of 6 members from 1st July 2019. The present membership limit for superannuation funds is 4 members.
- Change in audit requirements
The annual audit requirements for Self-Managed Superannuation Funds will be changed to a 3-yearly requirement for SMSFs with a history of good record-keeping and compliance. This change will apply from 1st July 2019.
- Preventing inadvertent concessional cap breaches
Individuals whose income exceeds $263,157 and have multiple employers, will be able to nominate that their wages from certain employers are not subject to the superannuation guarantee from 1st July 2018. The measure is intended to ensure eligible individuals can avoid unintentionally breaching the $25,000 annual concessional contributions cap as a result of multiple superannuation contributions.
- Improving integrity of personal superannuation contributions
The Australian Taxation Office will modify individual income tax return forms to include a tick box for an individual to confirm that they have complied with the requirements to submit a “Notice of Intent” where they intend to take a tax deduction for personal superannuation contribution.
- Superannuation work test exemption for recent retirees
The government will introduce an exemption from the work test for voluntary contributions to superannuation from 1st July 2019 for people aged 65 – 74 with superannuation balances below $300,000, in the first year that they do not meet the work test requirements.
- Annual cap on passive fees
3% annual cap will be introduced on passive fees charged by superannuation funds on accounts with balances below $6,000. This change will occur from 1st July 2019.
- Banning of exit fees
The government intends to ban exit fees on all superannuation accounts. This change will occur from 1st July 2019.
- Some inactive superannuation account balances to be transferred.
The government will amend the regulations to ensure that all inactive superannuation accounts with balances under $6,000 are transferred to the Australian Taxation Office. This change will occur from 1st July 2019.
If you would like to discuss any of the items included in the Australian government’s 2018/19 Budget, please do not hesitate to contact us.
Please note: The government must submit its budget to the House of Representatives and the Senate for debate and passing of the legislation before most of the items become law, therefore some of the items discussed have not yet been legislated by Federal Parliament.
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