Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Super wishlist: what the industry hoped for

In the lead up to the 2019 Budget, there were hundreds of submissions sent to the Treasury on how our taxes should be collected and how government income should be spent.

We take a look at what the superannuation industry suggested, in particular focussing on any changes proposed to the current super regime. None of the significant changes were adopted.

Self-Managed Super Fund Association (SMSFA)

Contributions

  • An increase in tax deductible contributions from $25,000 to $35,000 p.a. if you are 50 years or older.
  • Allow you to contribute to super up to age 75 without having to meet a work test once you reach 65.

Super balances

  • Allowing a couple to even out their super balances which will allow both to use the $1.6 million pension cap more effectively.

Benefit withdrawals

  • Allowing the many varieties of pensions that have evolved over time to be converted to account-based pensions. For most, this would mean just one type of pension to be paid, to help simplify the super system.
  • Allowing transition to retirement pensions to convert to account-based pensions when you meet a retirement condition of release of age 65.

Fund administration

  • Simplifying the contribution rules so that SMSF trustees/members who move overseas for a short period can be treated on the same basis as members of larger super funds. This mainly impacts on your ability to make contributions to your SMSF while you are overseas. The same situation does not occur with larger super funds.
  • No need for your SMSF to obtain an actuarial certificate where it is wholly in retirement phase for the year.
  • Re-introduction of SMSFs to choose when the assets are pooled or segregated for taxation purposes irrespective of your super balance. From 1 July 2017 many SMSFs had no choice but to use the pooled method.
  • Simplifying how child pensions are counted for purposes of the $1.6 million transfer balance cap.
  • Encourage the government to pass the legislation which requires it to take into account the objective of superannuation independently of the government’s budget process.

Chartered Accountants Australia and New Zealand

Contributions

  • Increase tax deductible contributions from $25,000 to $50,000.
  • Replace annual contributions with lifetime caps.
  • Introduce a once-off amnesty for employers who have not been paying the correct amount of superannuation guarantee contributions. Legislation is currently in the parliament to allow this to occur but has not been passed.

Super balances

  • Permit joint super accounts for spouses.

Benefit withdrawals

  • Allowing the conversion of previous types of pensions to account-based pensions. This would help simplify the super system.

Fund administration

  • No need for your SMSF to obtain an actuarial certificate where it is wholly in retirement phase for the year.
  • A review of binding death benefit nominations.

Tax & Super Australia

Contributions

  • Increase tax deductible contributions from the current $25,000 if you are 50 or older irrespective of your super balance.
  • Extension of the carry-forward concessional contributions for unused concessional contributions to be carried forward without any restrictions.
  • Removal of the work test for anyone aged between 65 and 75.
  • Insurance proceeds received by a fund member from temporary or permanent invalidity be contributed to super without any contribution limits applying. This would be similar to the treatment of structured settlement payments under the current rules.

Fund administration

  • Changes to the administration of the $1.6 million transfer balance cap concerning notification of tax payments.
  • Alternative dispute resolutions where an SMSF has suffered loss due to fraud or dishonesty.

Australian Institute of Superannuation Trustees (AIST)

Contributions

  • Abolish the minimum monthly superannuation guarantee income threshold of $450 so that all employees irrespective of earnings will have super paid for them.
  • Taxpayers eligible for the low-income superannuation tax offset receive an additional superannuation contribution.
  • Superannuation guarantee contributions be paid on parental leave payments.
  • Extension of superannuation guarantee to independent contractors and self-employed workers.
  • Increase the rate of superannuation guarantee earlier than the proposed program.

Super balances

  • Greater work by the Australian Taxation Office to reconnect super fund members with their lost super.

Fund administration

  • Establish a council to assess whether the superannuation system is delivering its objectives.
  • Including the right to superannuation as part of a person’s employment conditions.
  • Encourage the government to pass the legislation which requires it to take into account the objective of superannuation independently of the government’s budget process.

 

Graeme Colley is the Executive Manager, SMSF Technical and Private Wealth at SuperConcepts, a sponsor of Cuffelinks. This article is for general information purposes only and does not consider any individual’s investment objectives.

For more articles and papers from SuperConcepts, please click here.

 

RELATED ARTICLES

Super boost: more flexibility for retirement

YourSuper will save $17.9 billion! Surely you’re joshing

Super timing guide for contributions and reversionary pensions

banner

Most viewed in recent weeks

10 little-known pension traps prove the value of advice

Most people entering retirement do not see a financial adviser, mainly due to cost. It's a major problem because there are small mistakes a retiree can make which are expensive and avoidable if a few tips were known.

Check eligibility for the Commonwealth Seniors Health Card

Eligibility for the Commonwealth Seniors Health Card has no asset test and a relatively high income test. It's worth checking eligibility and the benefits of qualifying to save on the cost of medications.

Hamish Douglass on why the movie hasn’t ended yet

The focus is on Magellan for its investment performance and departure of the CEO, but Douglass says the pandemic, inflation, rising rates and Middle East tensions have not played out. Vindication is always long term.

Start the year right with the 2022 Retiree Checklist

This is our annual checklist of what retirees need to be aware of in 2022. It is a long list of 25 items and not everything will apply to your situation. Run your eye over the benefits and entitlements.

At 98-years-old, Charlie Munger still delivers the one-liners

The Warren Buffett/Charlie Munger partnership is the stuff of legends, but even Charlie admits it is coming to an end ("I'm nearly dead"). He is one of the few people in investing prepared to say what he thinks.

Should I pay off the mortgage or top up my superannuation?

Depending on personal circumstances, it may be time to rethink the bias to paying down housing debt over wealth accumulation in super. Do the sums and ask these four questions to plan for your future.

Latest Updates

Investment strategies

Three ways index investing masks extra risk

There are thousands of different indexes, and they are not all diversified and broadly-based. Watch for concentration risk in sectors and companies, and know the underlying assets in case liquidity is needed.

Investment strategies

Will 2022 be the year for quality companies?

It is easy to feel like an investing genius over the last 10 years, with most asset classes making wonderful gains. But if there's a setback, companies like Reece, ARB, Cochlear, REA Group and CSL will recover best.

Shares

2022 outlook: buy a raincoat but don't put it on yet

In the 11th year of a bull market, near the end of the cycle, some type of correction is likely. Underneath is solid, healthy and underpinned by strong earnings growth, but there's less room for mistakes.

Gold

Time to give up on gold?

In 2021, the gold price failed to sustain its strong rise since 2018, although it recovered after early losses. But where does gold sit in a world of inflation, rising rates and a competitor like Bitcoin?

Investment strategies

Global leaders reveal surprises of 2021, challenges for 2022

In a sentence or two, global experts across many fields are asked to summarise the biggest surprise of 2021, and enduring challenges into 2022. It's a short and sweet view of the changes we are all facing.

Shares

What were the big stockmarket listings in record 2021?

In 2021, sharemarket gains supported record levels of capital raisings and IPOs in Australia. The range of deals listed here shows the maturity of the local market in providing equity capital.

Economy

Let 'er rip: how high can debt-to-GDP ratios soar?

Governments and investors have been complacent about the build up of debt, but at some level, a ceiling exists. Are we near yet? Trouble is brewing, especially in the eurozone and emerging countries.

Sponsors

Alliances

© 2022 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. Any general advice or ‘regulated financial advice’ under New Zealand law has been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. For more information refer to our Financial Services Guide (AU) and Financial Advice Provider Disclosure Statement (NZ). You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.

Website Development by Master Publisher.