Following last year’s big changes to the superannuation rules, this year has seen smaller tweaks to the super system. We note that there will be some compliance related changes to the deduction of personal contributions and the audit cycle of SMSFs.
Maximum number of super members
The maximum number of allowable members in new and existing self-managed superannuation funds (SMSFs) and small APRA funds is proposed to be increased from four to six. This measure will commence from 1 July 2019
This will provide greater flexibility for joint management of retirement savings, in particular for large families.
Deductions for personal contributions
The integrity of the “notice of intent” processes for claiming personal superannuation contribution tax deductions is proposed to be improved. This measure will commence from 1 July 2018.
Currently, some individuals receive deductions on their personal superannuation contributions but do not submit a notice of intent, despite being required to do so. This results in their superannuation funds not applying the appropriate 15% tax to their contribution. As the contribution has been deducted from the individual’s income, no tax is paid on it at all.
Voluntary contributions to super funds
An exemption is proposed to be introduced from the work test for voluntary contributions to superannuation, for people aged 65-74 with superannuation balances below $300,000, in the first year that they do not meet the work test requirements. The start date of the said measures is July 1, 2019.
Currently, the work test 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.
Three-yearly audit cycle for SMSFs
The annual audit requirement is proposed to be changed to a three-yearly requirement for SMSFs with a history of good record-keeping and compliance, to commence from 1 July 2019.
This measure will reduce red tape for SMSF trustees that have a history of three consecutive years of clear audit reports and that have lodged the fund’s annual returns in a timely manner.
Recovery of tax and superannuation debts
The Government will provide $133.7 million to the ATO to continue to deliver on a range of strategies that sustain both an increase in debt collections and an improvement in the timeliness of debt collections
This will extend, and roll into ongoing funding, the measure announced in the August 2013 economic statement addressing the level of unpaid tax and superannuation in the community that would otherwise terminate on 30 June 2018.
The measure will ensure the ATO is able to continue to target those taxpayers gaining an unfair financial advantage over those who pay their fair share of tax and superannuation.
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