Government to make changes to super co-contribution regulations
The government has released draft regulations for super co-contributions that remake the existing regulations from 2004 and include some minor changes.
The Morrison government has released for consultation the draft Superannuation (Government Co‑contribution for Low Income Earners) Regulations 2022 (the draft regulations).
The draft regulations remake the existing Superannuation (Government Co‑contribution for Low Income Earners) Regulations 2004 (2004 regulations), which are due to sunset on 1 April 2022.
The draft regulations improve the 2004 Regulations by omitting redundant provisions, simplifying language and restructuring provisions for ease of navigation.
This includes minor changes to increase the use of headings and references to “section” rather than “regulation” in accordance with modern drafting practice.
“The only substantive changes in the draft regulations are amending the definition of an eligible account to receive super co-contribution payments so that it excludes those which only provide terminal medical condition benefits in addition to the existing exclusion on accounts which provide only death or incapacity benefits,” superannuation minister Jane Hume said.
“This change is consistent with the intention that the super co-contribution payment not be paid to insurance only accounts, where the contribution would subsidise the payment of insurance premiums rather than contribute to increasing an individual’s retirement savings.”
It will also clarify the operation of section 7 relating to where a government co‑contribution is to be directed in specific circumstances. The draft regulations ensure that only one item will apply in the event of multiple circumstances being applicable.
The draft regulations and explanatory statement are available on the Treasury website. Consultation on the draft regulations will be open for a four‑week period. Submissions can be made up until 14 January 2022.
The government welcomes the community’s views on the draft regulations.
Tony Zhang is a journalist at Accountants Daily, which is the leading source of news, strategy and educational content for professionals working in the accounting sector.
Since joining the Momentum Media team in 2020, Tony has written for a range of its publications including Lawyers Weekly, Adviser Innovation, ifa and SMSF Adviser. He has been full-time on Accountants Daily since September 2021.