Highlights for Super

  • Work test exemption changes
  • Three-yearly audit cycle for some SMSFs
  • SMSF Member limit to increase from 4 to 6
  • Preventing inadvertent concessional cap breaches by certain employees
  • Deductions for personal contributions

Key Points

Work test exemption changes

From 1 July 2019 the Government will be introducing an exemption from the work test for voluntary contributions to superannuation. It will be available for the following retirees:

  • Aged between 65 and 74
  • Having their superannuation balances less than $300,000
  • In the first financial year that they do not meet the work test.
  • The exemption will be available for one year from the end of the financial year in which they last met the work test.

Currently, the work test requires individuals who are 65-74 to have worked at least 40 hours within 30 consecutive days in a financial year before they can make any personal contribution to superannuation.

Three-yearly audit cycle for some SMSFs

From 1 July 2019, the Government will change the annual audit requirement to a three-yearly requirement for SMSFs with a history of good record-keeping and compliance. 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.

SMSF member limit to increase from 4 to 6

From 1 July 2019, the Government will increase the maximum number of allowable members in new and existing SMSFS and small APRA funds from four to six. This will provide greater flexibility for joint management of retirement savings, in particular for large families.

Preventing inadvertent concessional cap breaches by certain employees

From 1 July 2018, the Government will allow individuals whose income exceeds $263,157, and who have multiple employers, to nominate that their wages from certain employers are not subject to the superannuation guarantee (SG). The measure will allow eligible individuals to avoid unintentionally breaching the $25,000 annual concessional contributions cap as a result of multiple compulsory SG contributions. Employees who use this measure could negotiate to receive additional income, which is taxed at marginal tax rates.

Deductions for personal contributions

The Government intends to improve the integrity of the ‘notice of intent’ (‘NOI’) processes for claiming personal superannuation contribution tax deductions. Currently, some individuals receive deductions on their personal superannuation contributions but do not submit a NOI, 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. The additional funding will enable the ATO to develop a new compliance model, and to undertake additional compliance and debt collection activities. From 1 July 2018, the ATO will modify income tax returns to alert individuals to the NOI requirements with a tick box to confirm they have complied.