The Government's "Protecting Your Super Package"

From 1 July 2019, the Government will introduce a 'Protecting Your Super Package' covering fees, lost member accounts and insurance arrangements.

Passive fees
The Government will introduce a cap on fees for superannuation accounts with low balances.

If the balance of a member's superannuation account is less than $6,000, the maximum amount of administration and investment fees that can be deducted from the account in the following six month period is 1.5% of the balance, or $90 per six months.

Exit fees
Exit fees will be banned on all superannuation accounts, regardless of the balance of the account.

Super funds will be prohibited from automatically providing insurance to certain members.The member categories that must opt-in for insurance cover include:

  • new accounts for a person under age 25
  • members with account balances below $6,000
  • members with accounts that have been inactive for 13 months.

Funds will be required to notify affected members by 1 May 2019 in order to provide them with the opportunity to elect to continue their insurance.

Goodwin Chivas & Co Commentary
This package is designed to reduce the erosion of super funds with small balances. Funds may need to further strengthen their member communication and education regarding the value of insurance.

Notice of intention to claim a personal tax deduction
From 1 July 2018, there will be changes to the process for members claiming a tax deduction for contributions made to super. The current process of claiming a tax deduction for personal super contributions is convoluted and complex.

Goodwin Chivas & Co Commentary
The simplification of this process is a welcome change 


Super guarantee opt-out

From 1 July 2018, individuals who have multiple employers and whose employment income exceeds $263,157 pa will be able to opt-out of superannuation guarantee payments that would otherwise result in excess concessional contributions. Employees may be able to negotiate higher income in lieu of super guarantee contributions.


Goodwin Chivas & Co Commentary

This will be a welcome change for many employees on higher incomes with multiple roles.

Super Fund Membership

Self-managed super funds (SMSFs) will be able to increase the number of members from a maximum of four to a maximum of six. The increased membership will apply from 1 July 2019. Some SMSFs will need to ensure that their trust deeds are updated to lift the restriction on the number of members from four.


Goodwin Chivas & Co Commentary

This may appeal to some families, particularly in respect of intergenerational wealth transfers.


SMSF Three Year Audit Cycle

From 1 July 2019, SMSFs that have clear audit reports over three consecutive years and have lodged the fund's annual returns in a timely manner, will be able to move to a three-year audit cycle. The measure will reduce compliance costs for SMSF trustees who have a good compliance history. The Government will consult with industry stakeholders on this issue.


Goodwin Chivas & Co Commentary

It will be interesting to see what the consultation brings, in line with Australian Securities and Investments Commission's (ASIC's) ongoing review of SMSF auditors.


Work Test Exemption

From 1 July 2019, members aged between 65 and 74 who have super balances below $300,000 will be able to make voluntary contributions in the first year that they do not meet the work test requirements.


Goodwin Chivas & Co Commentary

This will provide retirees with very low balances some additional flexibility and may assist with small business CGT concessions.

If you have any questions about how these changes to superannuation may affect you, please contact us.





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