Major superannuation changes off the table following Liberal win
With the Liberal party winning the federal election, the SMSF industry is likely to be spared from some of the more significant changes that were planned by Labor, with only some minor policy tweaks on the cards.
Despite speculation during the lead up to the election about a Labor election win, the Coalition has secured a third term in government.
In an industry poll conducted by SMSF Adviser ahead of the election, around 60 per cent of the 1,376 respondents stated that the Liberal party would deliver better outcomes on superannuation.
With Labor planning some major policy changes including the removal of cash refunds for excess dividend imputation credits, reduction in contribution caps and changes to other superannuation concessions, there had previously been concerns flagged by associations, major bodies and SMSF service providers about some of its proposed policy changes and their impact on professionals and SMSFs.
While the Coalition hasn’t flagged any major policy changes to superannuation, it has announced a few minor changes that it plans to make.
It announced an amendment in the budget, which would enable Australians aged 65 and 66 to make voluntary superannuation contributions even if they do not meet the current work test requirement to work at least 40 hours over a 30-day period in the year they seek to make contributions.
It also stated in the budget that it would increase the age limit for spouse contributions from 69 to 74 years.
Currently, those aged 70 years and over cannot receive contributions made by another person on their behalf.
It also plans to extend access to the bring-forward arrangements to those aged 65 and 66. The bring-forward rules currently allow those aged less than 65 years to make three years’ worth of non-concessional contributions, which are capped at $100,000 a year, to their super in a single year.
The budget also contained some proposed changes to the calculation of exempt current pension income, including the removal of a redundant requirement for superannuation funds to obtain an actuarial certificate when calculating ECPI using the proportionate method, where all members of the fund are fully in the retirement phase for all of the income year.
Before the election, the Coalition stated that it planned to proceed with its measure to increase the SMSF member limit, despite the removal of the measure shortly before Parliament was dissolved.
Prime Minister Scott Morrison has also guaranteed “no new taxes on superannuation”. However, there is no specified time frame for this promise.
The Liberal Party implemented most of its major changes to superannuation as part of the 2016 budget when it introduced the transfer balance cap, changes to contribution caps and the $500,000 lifetime cap for non-concessional contributions, which was later dropped.
While the policies of the two major parties have been covered extensively, it is unknown what role the independent parties will play over the next three years in shaping superannuation and tax policy.