Budget Special: Superannuation
It is a relief to note that no new major superannuation measures given the recent history of changes, however there were a few tweaks to the superannuation rules which are designed at reducing costs and removing fees.
The biggest change for Self Managed Superannuation Fund’s (SMSF) sits around a reduction in the compliance costs for funds that have a good compliance history. From 1 July 2019 SMSF’s with a good history will no longer be required to have an annual audit and instead will be required to have an audit on a 3 year cycle.
For SMSF’s the number of permitted members has increased from the current number of 4 to 6. This is a simple measure aimed at providing greater flexibility for joint management of retirement savings, especially for large families.
In addition to the above items designed to save costs, from 1 July 2019 all exit fees will be banned on all superannuation accounts and a 3% annual cap will be introduced on passive fees charged.
The work test will also change with effect from 1 July 2019 with an exemption being introduced for people aged 65-74 with superannuation balances below $300,000 in the first year they do not meet the work test.
The current requirement of a notice of intent (NOI) to claim a deduction for personal superannuation contributions will continue and the policing of these contributions and associated tax deductions will increase. Historically, some individuals were not submitting a NOI and still claiming a deduction thus avoiding the 15% contribution tax within the superannuation fund.