Federal Budget 2018-19 - What It Means For Superannuation
SMSF member limit to increase from 4 to 6 - law to be amended
The Budget confirmed that the maximum number of allowable members in new and existing self-managed superannuation funds (SMSFs) and small APRA funds will be expanded from 4 to 6 members from 1 July 2019.
Superannuation work test exemption for contributions by recent retirees
The Government will introduce an exemption from the work test for voluntary superannuation contributions by individuals aged 65-74 with superannuation balances below $300,000 in the first year that they do not meet the work test requirements.
Currently, the work test in reg 7.04 of the SIS Regulations restricts the ability to make voluntary superannuation contributions for those aged 65-74 to individuals who self-report as working a minimum of 40 hours in any 30-day period in the financial year. The measure will give recent retirees additional flexibilities to get their financial affairs in order in transition to retirement.
Super Guarantee opt-out for high-income employees who breach the concessional cap
The Government will allow 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.
As SG contributions are counted as concessional contributions, high-income earners with several employers (eg doctors who are employees of multiple hospitals and company directors holding a number of board positions) are especially at risk of inadvertently breaching the annual concessional cap of $25,000.
SMSF audit cycle of 3 years for funds with good compliance history
The annual audit requirement for self-managed superannuation funds (SMSFs) will be extended to a 3-yearly cycle for funds with a history of good record-keeping and compliance. The measure will apply to SMSF trustees that have a history of 3 consecutive years of clear audit reports and that have lodged the fund's annual returns in a timely manner.
Super fees to be capped at 3% for small accounts, exit fees banned
Passive fees charged by superannuation funds will be capped at 3% for small accounts with balances below $6,000, while exit fees will be banned for all superannuation accounts from 1 July 2019. The Minister for Revenue and Financial Services, Kelly O'Dwyer, said there was around 9.5 million super accounts with a balance less than $6,000 in 2015-16. To avoid these small accounts from being eroded, the Government will cap the administration and investment fees at 3% annually, Ms O'Dwyer said.
Chartered Accountants, Thomson Reuters (2018) Federal Budget: Tax Bulletin 2018-2019
MYOB (2018) Explained: Federal Budget 2018
TaxBanter (2018) Federal Budget 2018-19