Posted on July 3, 2019 by Christabelle Harris
Saturday night saw the GeersSullivan staff and partners bring in the end of financial year at Gazette at Print Hall.
The evening was spent mingling and reflecting on the past 12 months as well as looking forward to the excitement of a new year ahead.
As we turn the corner on another financial year, on behalf of all of us at GeersSullivan, we would like to thank you for your continued support and look forward to working closely with you all in the 2020 financial year.
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Posted on July 2, 2019 by Christabelle Harris
With Labor having planned some major superannuation policy changes, there had previously been concerns about their impact on Self Managed Superannuation Funds (SMSF). Now, with the surprise Coalition victory, the Morrison Government has the opportunity to move forward on their proposed changes to superannuation.
Whilst the Coalition hasn’t proposed any major policy changes to superannuation, it has announced a few minor changes, many of these policies were provided in the 2019 Federal Budget. This article summarises the Coalition’s main proposals relating to superannuation.
The Coalition announced three measures that will allow older individuals to make superannuation contributions from 1 July 2020 onwards.
Work test exemption for ages 65 and 66
Relaxation of the work test rules relating to contributions so that individuals aged 65 and 66 can make voluntary superannuation contributions (both concessional and non-concessional) even if they do not meet the work test.
This is in addition to the previously announced ‘Work Test Exemption’ where from 1 July 2019, individuals aged 65 to 74 with a total superannuation balance below $300,000 will be able to make voluntary contributions for 12 months from the end of the financial year in which they last met the work test.
Currently, individuals aged 65 to 74 can only make voluntary superannuation contributions if they meet the work test of working a minimum of 40 hours over a 30-day period in the relevant financial year they seek to make contributions.
Individuals with a total superannuation balance of $1.6m or over are not eligible to make non concessional contributions, regardless of age.
Bring-forward extension for ages 65 and 66
Individuals aged 65 and 66 will also be able to make up to three years of non-concessional contributions under the bring-forward rule, provided their total superannuation balance is less than $1.4m.
Reduced non-concessional bring forward caps apply if an individual’s total superannuation balance is equal to or greater than $1.4m.
Currently the bring-forward rules allow individuals aged up to 65 years to make up to three years’ worth of non-concessional contributions to their super fund in a single financial year, subject to their total superannuation balance. The current non concessional contributions cap is $100,000 a financial year.
This means under the current non-concessional contribution caps, members aged under 67 will be allowed to make a $300,000 non-concessional contribution in a single year; assuming they haven’t already triggered the 3 year bring-forward period and their super balance was less than $1.4m at 30 June prior.
Spouse contributions allowed up to 74
The age limit for spouse contributions will be increased from 69 to 74 years.
Currently individuals aged 70 years and over cannot receive contributions made by a spouse on their behalf.
Individuals aged between 69 and 74 need to satisfy the work test in order to be eligible to receive the contribution made by their spouse.
You may be able to claim a tax offset of up to $540 if you make contributions to a complying super fund for your spouse. Your spouse’s income must be $37,000 or less for you to qualify for the full tax offset and less than $40,000 for you to receive a partial tax offset.
To be eligible for the maximum tax offset of $540 you need to contribute $3,000 and your partner’s annual income needs to be $37,000 or less.
There are limits on what can be contributed, please contact our office for more information.
Simplifying Exempt Current Pension Income (ECPI) calculations
The Coalition has also proposed changes to the calculation of exempt current pension income, including the removal of a redundant requirement for superannuation funds to obtain an actuarial certificate where all members of the fund are fully in the retirement phase for the whole financial year.
From 1 July 2020 members with interests in both the accumulation and retirement phases during a financial year will be allowed to choose their preferred method of calculating ECPI. This is a welcome change and should mean that SMSFs will be able to choose the method which provides the most tax-effective outcome.
Allowing SMSFs to have 6 members
It is proposed to increase the maximum number of members for a SMSF from four to six.
Currently SMSFs can have up to four members at any time.
Expansion and delay of SuperStream Rollover Standard
The ATO will receive $19m to facilitate the inclusion of superannuation release authorities by electronic request. This will involve expanding the electronic SuperStream Rollover Standard used for the transfer of information and money between employers, superannuation funds and the ATO.
To coincide with this the start date for SMSF rollovers in SuperStream will be delayed until 31st March 2021.
Please contact our Superannuation Manager Helen Cooper on 08 9316 7000 should you wish to discuss your specific circumstances in more detail.
Any information provided in this article is general in nature and does not take into account your personal objectives, situation or needs. The information is objectively ascertainable and was not intended to imply any recommendation or opinion about a financial product. This does not constitute financial produce advice under the Corporations Act 2001.
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