Changes to Super
Changes to Superannuation from 1 July 2010
Changes to Unclaimed Super Money: Payment of small and insoluble lost accounts to the Australian Taxation Office (ATO)
From 1 July 2010 superannuation funds are required to transfer the following accounts to the ATO as unclaimed monies:
- lost member accounts with balances of less than $200 (small accounts).
- lost accounts which have been inactive for a period of 5 years and the fund has insufficient records to ever identify the owner of the account (insoluble accounts).
There has been no change to the requirement to pay unclaimed super to the ATO for:
- lost accounts for members aged 65 and older
- unclaimed money as a result of a family law payment split
- unclaimed benefits for deceased members
- temporary residents who have not claimed their benefit within 6 months of either their visa being cancelled or having left Australia
For further details of when member accounts may be transferred to the ATO please refer to [fund website] .
SMSF Member Verification
The Trustee is considering changes to the verification process for members wanting to roll-over their benefits to a SMSF, expected to start by November 2010. This is in response to increased fraudulent activity in relation to the establishment of Self Managed Superannuation Funds.
2010 Federal Budget
The Australian Government announced a number of changes to superannuation in the 2010 Federal Budget. Following is a summary of the main changes.
Before acting on any of this information, we recommend that you talk to a licensed financial adviser.
Note that at the time of producing this document the Budget proposals listed (with the exception of the Government co-contribution) have not been passed into legislation.
Government co-contribution
The co-contribution rate will remain at 100% on a permanent basis, payable on an individual’s eligible personal non-concessional superannuation contributions up to a maximum of $1,000 annually.
The current lower income and higher income thresholds will be frozen at $31,920 and $61,920 for the next two years (2010-11 to 2011-12). The co-contribution decreases by 3.33 cents for every $1 that a person earns over $31,920 p.a. and phases out altogether when their income reaches $61,920 p.a.
Increasing the Superannuation Guarantee
Subject to other legislation such as the Resources Rent Tax being approved, the current Superannuation Guarantee rate of 9% will increase gradually to 12% by the 2019-20 financial year. This will be phased in, starting in the 2013-14 financial year as follows:
| Financial Year | Rate (%) |
|---|---|
| 2013-14 | 9.25% |
| 2014-15 | 9.5% |
| 2015-16 | 10% |
| 2016-17 | 10.5% |
| 2017-18 | 11% |
| 2018-19 | 11.5% |
| 2019-20 | 12% |
Low Income Earners Government Contribution
Commencing in the 2012/2013 financial year the Government will refund the 15% contributions tax paid on concessional contributions, to a maximum of $500, for individuals with an adjusted taxable income of $37,000. This is expected to be paid into your superannuation account in the 2013/2014 financial year.
Source: Developed from Fact Sheet �Low Income earners Government Contribution appearing on the �Stronger, Fairer, Simpler� website at www.futuretax.gov.au
Benefit example (developed from an interpretation of the above announcement)
An individual earning $30,000 per year receives a 9% Superannuation Guarantee contribution of $2,700. When this is received in a superannuation fund the fund deducts 15% contribution tax, or $405 on behalf of the Government. It is expected that this $405 will be refunded into the member�s account.
Increasing Concessional Contribution Caps
The current $50,000 concessional contributions cap for individuals aged 50 or over is a transitional cap scheduled to expire from 1 July 2012. From 30 June 2012 the cap will be extended permanently for individuals aged 50 years or over who have total superannuation balances of less than $500,000.
| Financial Year | Concessional Caps | |||
| Individuals aged under 50 years | Individuals aged 50 years or more | |||
| 2010/2011 | $25,000 | $50,000 | ||
| 2011/2012 | $25,000 | $50,000 | ||
| Aged 50 years with super balances less than $500,000 | Aged 50 years with super balances $500,000 or more | |||
| From 2012/2013 | $25,000 | $50,000* | $25,000 | |
- Indexed
Source: Developed from Fact Sheet “Superannuation – Concessional Contribution Caps” appearing on the “Stronger, Fairer, Simpler” on the Future Tax website.
Raising the Superannuation Guarantee Age Limit from 70 to 75 years
Currently the Superannuation Guarantee only applies to people aged up to 70 years. From 1 July 2013 workers aged 70 to 74 years will be eligible to have Superannuation Contributions made on their behalf for the first time.
Source: Fact Sheet “Superannuation – Raising the Superannuation Guarantee Age Limit from 70 to 75” appearing on the “Stronger, Fairer, Simpler” on the Future Tax website.
