The Federal Budget for 2018-19 was released on 8 May 2018. We’ve summarised the main issues impacting super, and we’ll keep you updated about these proposed changes through our website and regular member newsletter.

Removal of automatic life insurance

The Government is proposing that insurance included in superannuation be provided on an ‘opt-in’ basis for members:

  • with balances of less than $6,000; or
  • who are under the age of 25 years; or
  • whose accounts have not received a contribution in 13 months and are inactive.

The measure is effective from 1 July 2019 and these members will have 14 months from 8 May 2018 to opt in or their insurance cover will be switched off. These measures will apply if you have received Death and Total and Permanent Disablement cover automatically.

Claiming tax deductions on your personal contributions

Members who make personal superannuation contributions and want to claim a tax deduction will need to make an ‘up front’ declaration in their tax return. Importantly, you will still need to send us the Australian Taxation Office (ATO) Notice of Intent to Claim form to claim your deduction. This measure will apply from 1 July 2018.

Voluntary contribution concessions for the newly retired

From 1 July 2019, the Government is proposing that members aged between 65 to 74 who are in their first financial year after their retirement, and who have less than $300,000 in superannuation, can make a voluntary superannuation contribution without needing to meet the work test. The work test prohibits people who work less than 40 hours in any 30-day period within a financial year from making voluntary contributions.

Reuniting you with your lost and inactive superannuation

The Government is proposing to transfer all inactive superannuation accounts with a balance below $6,000 to the ATO. The proposal is designed to help reduce the erosion of superannuation fund balances as a result of fees from multiple accounts. In addition, the ATO will help people with inactive superannuation accounts to consolidate into their active superannuation accounts. Both measures will apply from 1 July 2019. You don’t need to wait, you can consolidate other super into Rest now.

Lower fees for members with lower balances

The Government is proposing to introduce a three per cent annual cap on certain fees charged by superannuation funds on accounts with balances below $6,000 and will remove exit fees on all superannuation accounts. From 1 July 2019 it will not cost you anything to leave other superannuation funds to consolidate with Rest. However, please check if switching may affect your insurance.

Earn more without impacting your pension

From 1 July 2019, pensioners can earn up to $300 per fortnight (up from $250) from employment without reducing your age pension payments under measures proposed by the Government.