BUDGET 2019 – 2020
PERMANENT TAX RELIEF FOR MERGING SUPER FUNDS
The current tax relief for merging superannuation funds is due to expire on 1 July 2020. The Government will extend this measure permanently.
The tax relief, which enables superannuation funds to transfer revenue and capital losses to a new merged fund, and to defer taxation consequences on gains and losses from revenue and capital assets, has been available since December 2008.
STREAMLINING THE CALCULATION OF ECPI. DATE OF EFFECT FROM 1 JULY 2020.
The Government will streamline some administrative requirements for the calculation of exempt current pension income (ECPI).
Superannuation fund trustees with interests in both the accumulation and retirement phases during an income year will be able to choose their preferred method of calculating ECPI.
A redundant requirement for superannuation funds to obtain an actuarial certificate when calculating ECPI using the proportionate method will be removed where all members of the fund are fully in the retirement phase for all of the income year. This may occur in situations where a member has other superannuation interests outside of the SMSF. Currently, if a fund is entirely in pension phase (with a balance below $1.6 million), but a member has a superannuation interest somewhere else and a Total Superannuation Balance of more than $1.6m, then the SMSF will have to apply for an actuarial certificate, even though the certificate will confirm the obvious, that the fund is 100% in pension phase. This is a positive change to fix an anomaly in the system.
SUPERANNUATION ‘WORK TEST’ WATERED DOWN & AGE LIMIT FOR SPOUSE CONTRIBUTIONS INCREASED. DATE OF EFFECT 1 JULY 2020.
As previously announced, from 1 July 2020, Australians aged 65 and 66 will be able to make voluntary superannuation contributions (concessional and non-concessional) without meeting the Work Test. Currently, voluntary contributions can only be made if the individual has worked a minimum of 40 hours over a 30 day period (Work Test). Those aged 65 and 66 will also be able to make up to three years of non-concessional contributions under the bring-forward rule.
In addition, the age limit for spouse contributions will be increased from 69 to 74 years. Currently, those aged 70 years and over cannot receive contributions made by another person on their behalf.