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

Is 'The Great Australian Dream' a sham?

Six ways the Budget Office is probing super taxes

banner

Most viewed in recent weeks

The nuts and bolts of family trusts

There are well over 800,000 family trusts in Australia, controlling more than $3 trillion of assets. Here's a guide on whether a family trust may have a place in your individual investment strategy.

Welcome to Firstlinks Edition 581 with weekend update

A recent industry event made me realise that a 30 year old investing trend could still have serious legs. Could it eventually pose a threat to two of Australia's biggest companies?

  • 10 October 2024

Welcome to Firstlinks Edition 583 with weekend update

Investing guru Howard Marks says he had two epiphanies while visiting Australia recently: the two major asset classes aren’t what you think they are, and one key decision matters above all else when building portfolios.

  • 24 October 2024

Preserving wealth through generations is hard

How have so many wealthy families through history managed to squander their fortunes? This looks at the lessons from these families and offers several solutions to making and keeping money over the long-term.

A big win for bank customers against scammers

A recent ruling from The Australian Financial Complaints Authority may herald a new era for financial scams. For the first time, a bank is being forced to reimburse a customer for the amount they were scammed.

The quirks of retirement planning with an age gap

A big age gap can make it harder to find a solution that works for both partners – financially and otherwise. Having a frank conversation about the future, and having it as early as possible, is essential.

Latest Updates

Investment strategies

Warren Buffett is preparing for a bear market. Should you?

Berkshire Hathaway’s third quarter earnings update reveals Buffett is selling stocks and building record cash reserves. Here’s a look at his track record in calling market tops and whether you should follow his lead and dial down risk.

Economy

US election implications for investors and Australia

The return of Donald Trump to the US presidency brings the prospect of more US tax cuts and deregulation, but also more tariff hikes, trade wars and policy uncertainty. Here's what it means for markets going forward.

Retirement

The rising tension between housing debt and retirement balances

Australians are taking more mortgage debt into their 60s than ever before. Retirement planning assumptions haven’t adapted and could result in future income projections that ultimately disappoint retirees.

Investment strategies

Why megatrends can deliver big upside (and downside)

The magnitude and duration of society's most important trends are often underestimated. While these trends are usually touted as a tailwind, one in particular could have dark consequences for many assets.

Property

Fixing the construction industry house of cards

Australia needs to build new homes like never before but construction firms keep going belly up. Unless regulators act now, consumers will continue to carry the can.

Investment strategies

How investor portfolios have become riskier versus history

Risk in portfolios has dramatically increased as time horizons have shortened and investors have piled into equities. It's resulted in a growing disconnect between what investors need and what the financial industry is delivering.

Shares

The abacus, big data and a brief history of indexing

Equity indices have evolved over time, led by step-changes in our ability to manipulate data. Despite the rise of passive investing, they weren't initially meant to be investment tools.

Sponsors

Alliances

© 2024 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. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. 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.