Changes to superannuation regulations

Be aware of various new regulations and opportunities surrounding your superannuation

New legislation regarding contribution requirements, visibility and guarantee eligibility is currently or soon to be effective.

Reporting re-contributions of COVID-19 early super relief super amounts

Self-managed super fund (SMSF) members can now re-contribute amounts they withdrew under the COVID-19 early release of super program without them counting towards their non-concessional contributions cap.

These contributions can be made between 1 July 2021 and 30 June 2030.

The SMSF trustee will need to report this to us at or before the time of lodging the SMSF annual return (SAR) for the financial year in which they made the re-contribution.

The SMSF trustee can report this information to the ATO by using:

  • the bulk data exchange facility via Online services for business;
  • online services for agents; or
  • calling the ATO’s superannuation enquiries line at 13 10 20

Changes to the work test requirements for super contributions

Soon, older Australians will no longer have to meet the work test to make superannuation contributions.

From 1 July 2022, members under 75 years of age will be able to make or receive personal contributions and salary sacrificed contributions without meeting the work test, subject to existing contribution cap limits. They may also be able use the bring forward rule.

Fund Trustees will no longer have to administer the work test at the time they accept the contribution.

This change aims to simplify the rules governing superannuation contributions and increase flexibility for older Australians to save for their retirement through superannuation.

However, those aged 67 to 74 will need to meet the work test if they wish to claim a personal superannuation deduction for their contribution.

For those individuals there is no change to the way they lodge their notice of intent to claim or vary a personal super contribution deduction.

The only change is that the ATO will now be checking to see if they meet the work test at the time, they lodge their income tax return.

Changes to visibility of superannuation laws

From 1 April 2022, the Visibility of Superannuation law allows a party to a permitted family law proceeding to request superannuation information through the Federal Circuit and Family Court of Australia or Family Court of Western Australia. The Commissioner can disclose super information that the ATO holds to the Courts, who then provide the information to all parties in a proceeding.

Individuals or their legal representative can apply directly to the Courts for visibility of super information of a current or former spouse/de facto partner. To be eligible, individuals must be in a permitted family law proceeding in either of the Courts to make an application.

Superannuation may represent a significant asset and can make up a large portion of the overall asset pool in separation proceedings. Sharing information with the Courts will enable parties in permitted family law proceedings to have better visibility over super assets at the end of a relationship and is expected to result in faster and fairer property settlements.

There are no changes to any existing practices currently in place for individuals to gain super information directly from super funds. This new process will increase transparency and visibility where there are concerns that the other party has not fully disclosed all super assets.

Removal of the $450 per month threshold for super guarantee eligibility

On 11 May 2021, as part of the 2021–22 Federal Budget, the Australian Government announced it will remove the $450 per month threshold to expand coverage of super guarantee to eligible employees regardless of their monthly pay.

The change is now law by the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Act 2021 with royal assent on 22 February 2022.

From 1 July 2022, employers will be required to make super guarantee contributions to their eligible employee’s super fund regardless of how much the employee is paid. Employees must still satisfy other super guarantee eligibility requirements.

The ATO will work with digital service providers to assist them in updating their payroll and accounting software to be ready for this change.

Employers will need to check their payroll and accounting systems have been updated for super payments made after 1 July 2022 to ensure they correctly calculate their employee’s super guarantee entitlement.

ATO advice and guidance, including online tools and calculators will be updated on 1 July 2022 to account for this change.

We provide practical, no-nonsense, real-world advice and proven solutions that you can implement now to deliver fast results. Call Omnis Group’s Business Accountants in West Perth on 08 9380 3555 today.

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Source: ATO