Federal Budget 2018-19
The Federal Budget for 2018-19 was released on 8 May 2018. We’ve summarised the main proposals impacting super, and we’ll keep you updated on these proposed changes through our website and regular employer 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 to members who have received Death and Total and Permanent Disablement cover automatically.
Claiming tax deductions on 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 members will still need to send us the Australian Taxation Office (ATO) Notice of Intent to Claim form to claim a 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. Your employees can contact us to see how they can benefit from this proposed change.
Reuniting members with their 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. Your employees don’t need to wait, they 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 your employees anything to leave other superannuation funds to consolidate with Rest. However, they need to check if switching may affect their insurance.
Members earn more without impacting their pension
From 1 July 2019 pensioners can earn up to $300 per fortnight (up from $250) from employment without reducing their age pension payments under measures proposed by the Government.