Proposed superannuation legislation passed through Federal Parliament in February, including the Protecting Your Superannuation Package.
Under the proposed legislation accounts that have been inactive for 16 months (rather than 13 months) will have their automatic insurance switched off, although members will be able to opt-in to insurance.
The proposed legislation will also see accounts that have been inactive for 16 months (again, rather than 13 months in the original bill) transferred to the ATO. The ATO will be responsible for consolidating a member’s inactive accounts with their active account.
The Australian Government has announced a second attempt at removing automatic group insurance for members younger than 25 and with balances less than $6,000. A new bill, the Treasury Laws Amendment (Putting Members’ Interests First) Bill 2019, was introduced to parliament on 20 February. We will continue to update you on its progress.
The tables below summarise the upcoming legislative and regulatory changes that may have an impact on members, and the dates they are effective.
Treasury Laws Amendment (Protecting Your Superannuation) Bill 2018
| Start date: 30/06/2019 |
ATO to proactively reunite ATO-held inactive accounts with balances less than $6,000 with active accounts. Funds will be required to send these inactive accounts to the ATO. Therefore, members with inactive accounts could see their accounts held with their superannuation fund closed and their funds sent to the ATO and then subsequently added to their active accounts. |
| Start date: 01/07/2019 |
A three per cent annual cap on administration and investment fees for balances below $6,000 This means that members with a super account of less than $6,000 will no longer be charged any investment or administration fees over and above three per cent of their overall superannuation account balance. This does not include insurance premiums. |
| Start date: 01/07/2019 |
All superannuation funds to cease providing insurance cover to inactive accounts. This means that members who have been inactive for a continuous period of 16 months will no longer have insurance cover attached to their superannuation product unless instructed by the member in writing to maintain insurance |
| Start date: 01/07/2019 |
Commencement date for banning all exit fees. This means members exiting any superannuation fund will no longer be able to be charged an exit fee. |
Treasury Laws Amendment (2018 Measures No. 4) Bill 2018
Start date: 01/07/2019 |
All entities with employees are required to report the information required through Single Touch Payroll ending the previous exemption for employers with 19 or less employees. The ATO will provide different options to comply as including low cost options and options for micro employers (one to four employees). |
| Start date: For amounts payable after 1/07/2018 |
The ATO may direct employers who failed to comply with their superannuation guarantee obligations to pay unpaid superannuation guarantees and undertake relevant education courses. They can also disclose information regarding non-compliance to affected employees as well as impose penalties for non-compliance. |
Treasury Laws Amendment (Work Test Exemption) Regulations 2018
| Start date: 01/07/2019 |
Allows individuals from the age of 65 to 74 to make voluntary contributions for an additional 12 months from the end of the financial year where they last met the work test providing that their total superannuation balance is less than $300,000. |
The information provided here are for your information and interest only. It is not intended to be comprehensive, and does not constitute and must not be relied on as advice.