Coalition takes on Super Changes

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Coalition takes a stand on Labor’s previously announced changes to super


The Government has clarified its position on a variety of superannuation measures that were announced by the former Labor Government but not legislated prior to the election.


In, out, shake it all about.

The Government has stated that soon after they were elected they were advised that ninety-six tax and superannuation announcements (one dating back to March 2001) had not been legislated. Four of these have been dealt with as part of the carbon and mining tax repeal package.

The remaining ninety-two measures of unlegislated tax and superannuation measures have been classified into three groups:

•   Proceeding

•   Not proceeding

•   Further consultation required.


They are determined to resolve all policies relating to these matters by 1 December 2013 for inclusion in the Mid-Year Economic and Fiscal Outlook (MYEFO) and intend that the bulk of legislation that is to be progressed should be passed by the Parliament by 1 July 2014.

The most welcome announcement is that the Government will not proceed with the tax on superannuation pensions which earn above $100,000 per annum.
Superannuation proposals that are proceeding

Transfer of lost member accounts to the Australian Taxation Office (ATO)

The Government will proceed with increasing the threshold whereby lost accounts are required to be transferred to the ATO from $2,000 to $4,000, and then to $6,000. This is estimated to add more than $815 million to consolidated revenue.
Superannuation proposals that are not proceeding

Tax on superannuation pensions

The Government will not proceed with Labor’s announcement of 5 April 2013 which would have taxed people’s superannuation pension earnings above $100,000 in the draw-down phase. The Government acknowledged that complexity and compliance costs associated with this initiative are extreme and essentially undeliverable.

It is estimated that not proceeding with this measure will negatively impact the underlying cash balance by $313 million over the current forward estimates period.

This move will be welcomed by all superannuation fund members, especially those in Pension phase.


Superannuation proposals that require further consultation


Encouraging the take-up of deferred lifetime annuities

This measure is designed to encourage the take-up of deferred lifetime annuities (DLAs) by providing these products with the same concessional tax treatment that applies to investment earnings on superannuation assets supporting retirement income streams.


Greater certainty in relation to fund mergers

The 2012-13 MYEFO contained an announcement that the proportioning rule in the superannuation tax law does not apply to fund mergers. The lack of legislation confirming this has been a barrier to several fund mergers and clarification is welcomed.

Related:  Buying Property in Super


Clarifying the operation of certain superannuation trust deed clauses

This measure is designed to ensure that trust deed clauses cannot be used to prevent excess contribution amounts from being counted as contributions.


Acquisitions and disposals of certain assets between related parties of self-managed superannuation funds (SMSFs)

The May 2011 Budget contained an announcement that there would be restrictive rules for the acquisition and disposal of certain assets between SMSFs and related parties. Although legislation was drafted, it was excised from the relevant Bill, meaning that there were no changes made to the related party acquisition and disposal rules. Hopefully the Government will confirm that other changes to law, including the requirement for all SMSF transactions to be conducted at market value, providing there is sufficient comfort that no manipulation of prices will result in favourable capital gains tax and contribution cap outcomes.


Verification of SMSF members and bank accounts

The Cooper review recommended changes to ensure that superannuation money is transferred to a valid SMSF bank account. The recommendation included that a register is provided to enable APRA funds to check SMSF details to meet data and e-commerce standards. This proposal appears quite valid given that often bank officers opening the relevant accounts do not understand the significance of the difference between a personal tax file number (TFN) and an SMSF TFN and ABN. This can often result in personal accounts being opened instead of SMSF accounts to get better rates or lower fees. It is not until the auditor of the fund comes along that often the mistake is recognised. Worse still, the ATO includes fund income in a personal tax return rather than an SMSF return.


Superannuation fund reporting

It was announced in the May 2011 Budget that superannuation funds would be required to notify members whether contributions have been received, either quarterly or six monthly (to alert members about unpaid superannuation). Superannuation funds are already required to report to members on a regular basis and it seems unclear as to what additional benefit this measure would add.


Stronger Super measures

Inter-fund consolidation of accounts less than $1,000The ATO will initiate consolidation of certain members’ superannuation accounts with balances below $1,000. Affected superannuation funds are then required to facilitate consolidation of the member’s account between funds unless the member opts out.


Rollovers to SMSFs

Rollovers to SMSFs will become a ‘designated service’ under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF). Superannuation funds will be required to introduce additional checks and safeguards.

Related:  Charitable Bequests Using Imputation Bonds


SMSF administrative directions and penalties

This measure gives the ATO flexible and cost-effective penalty options to deal with SMSFs that breach the law. This was a surprise exclusion from legislation passed prior to the election, given it appeared to have bi-partisan support, together with broad support from industry.


Should you wish to discuss these or any other questions please feel free to email or call 1300 99 77 34.

Disclaimer: The above information is for general knowledge purposes only. Please take advice for your specific situation before investing in property. Every person’s personal situation is different and requires a different solution – See more at:

Disclaimer: The above information is for general knowledge purposes only. Please take advice for your specific situation before investing in property. Every person’s personal situation is different and requires a different solution

– See more at:

Disclaimer: The above information is for general knowledge purposes only. Please take advice for your specific situation before investing in property. Every person’s personal situation is different and requires a different solution

– See more at:

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