In a recent blog post, Smarter SMSF chief executive Aaron Dunn said 2019 had been a year of little change from a legislative perspective for the SMSF sector, as much of the focus had been on a potential Labor victory in the May federal election that never came to pass.
“With much of the focus remaining on the outcomes of the royal commission and more recently the terms of reference being set for the Retirement Income Review, there has been very little movement on many of the superannuation measures announced in the federal budget in April this year,” Mr Dunn said.
“As we reach the end of the 2019 calendar year, there are a range of measures that are outstanding that impact the SMSF sector.”
Mr Dunn pointed out that two pieces of legislation affecting the sector had been introduced into Parliament earlier in December but had not passed before the summer break.
These included the Treasury Laws Amendment (Recovering Unpaid Superannuation) Bill 2019, which provided a one-off amnesty for employers to correct historic SG non-compliance, and the Treasury Laws Amendment (2019 Measures No. 3) Bill 2019, which aimed to correct the debit value of market-linked pensions upon commutation.
Several other changes had also been announced in the 2019 budget but were yet to be introduced as legislation, despite the fact they were slated to commence in July 2020, Mr Dunn noted.
These included allowing voluntary contributions to be made for 65 and 66-year-olds who did not pass the work test, extending the ability for spouse contributions up to age 74 and streamlining the administrative requirements for the calculation of exempt current pension income.
At the same time, the government had not reintroduced laws to Parliament around increasing the number of SMSF members from four to six, though this had been its policy at the election.
It was also not expected to continue with the idea of extending the audit cycle for SMSFs to three years, following consultation in August 2018 which had not yielded any draft legislation.
“While we won’t be getting any answers from the government around any of these measures for Christmas, let’s hope as we move into 2020 that we get an update on many of these items early in the new year,” Mr Dunn said.
Some regs have come out to address that this week
Another bit of legislation that has not been dealt with relates to pensions paid after a member dies at a higher rate for a short period after death then dropping down permanently to a lower figure. This was originally in Treasury Laws Amendment (Miscellaneous Amendments) Regulations 2019 and has an effective date of 1Jul17 but the adverse effect has already been felt by some members and cannot be effectively be fixed due to death benefit pensions having to be paid out of a fund if commuted due to the Transfer Balance Cap being breached.