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Superannuation

Last updated 4 April 2024

[202407] Delivering Better Financial Outcomes (Quality of Advice) – Recommendation 7

Registered

March 2024

Expected completion of consultation

June 2024

Consultation status

Targeted consultation is underway.

Consultation purpose

To seek feedback on public advice and guidance needs for the new measure addressing financial advice fees charged under section 99FA of the Superannuation Industry (Supervision) Act 1993

Description

The government has announced its response to the December 2022 Final Report of the Quality of Advice ReviewExternal Link by releasing an exposure draft: Delivering Better Financial Outcomes Package – reducing red tape and other measures.

Relevantly, Recommendation 7 seeks to clarify the legal basis for superannuation trustees to charge individual members for financial advice from their superannuation account, as well as the associated tax consequences.

Division 2 of the exposure draft makes amendments to the Income Tax Assessment Act 1997 to ensure that financial advice fees charged under section 99FA of the Superannuation Industry (Supervision) Act 1993 are:

  • tax-deductible for the fund
  • not treated as superannuation benefits of the member.

Such fees are tax deductible to the fund to the extent that the amount charged to the member’s account was not incurred in relation to gaining or producing the fund’s exempt income or non-assessable non-exempt income. The measure is proposed to have retrospective effect.

The ATO is seeking feedback on whether there are priority issues where public advice and guidance is needed to help superannuation industry stakeholders understand how the new law applies to their circumstances.

 

Who we are consulting

  • Professional associations
  • Superannuation industry representatives

 

Consultation lead

Ernest Lui, Public Groups
ernest.lui@ato.gov.au
Phone 02 9374 2901

[202330] Better Targeted Superannuation Concessions

Registered

November 2023

Expected completion of consultation

June 2024

Consultation status

Targeted consultation is underway.

Consultation purpose

To seek feedback on public advice and guidance priorities for the Better Targeted Superannuation Concessions measure.

Description

On 28 February 2023, the Australian Government announced it would reduce the superannuation tax concessions available to individuals whose total superannuation balance exceeds $3 million.

The changes will apply from 1 July 2025 onwards. This means individuals with a total super balance over $3 million at the end of the 2025–26 financial year will be subject to a tax of 15% on earnings attributed to the balance that exceeds $3 million (Division 296 Tax).

The Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023External Link and the Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023External Link were introduced to Parliament on 30 November 2023.

The ATO is seeking feedback on whether there are priority issues where public advice and guidance is needed to help superannuation industry stakeholders understand how the new law applies to their circumstances.

 

Who we are consulting

  • Superannuation industry bodies
  • Professional associations

 

Consultation lead

Kerry Lake, Superannuation and Employer Obligations
kerry.lake@ato.gov.au
Phone 07 3213 3611

[202328] Mapping the veteran experience

Registered

November 2023

Expected completion of consultation

May 2024

Consultation status

Feedback is being considered.

Consultation purpose

To understand the experience of veterans in receipt of military invalidity superannuation as they interact with the ATO.

Description

The work to understand the veteran experience takes place in a context defined by two significant events, the Federal Court decision in Commissioner of Taxation v Douglas [2020] FCAFC 220 (the Douglas decision) and the ongoing Royal Commission into Defence and Veteran Suicide.

The Douglas decision impacted the tax treatment of invalidity pensions paid to military Veterans by Commonwealth Superannuation Corporation (CSC) under the Military Superannuation and Benefits Scheme (MSB) and Defence Force Retirement and Death Benefits Scheme (DFRDBS).

The case determined the income should be treated as a series of superannuation lump sum payments instead of a superannuation income stream. The treatment as a superannuation lump sum payment usually has a greater tax concession, however not for all. The government legislated a tax offset (Veteran Superannuation Tax offset (VTSO)) to ensure veterans were not worse off with this change.

 

Who we are consulting

  • Tax Professionals
  • Veteran advocacy groups
  • Veterans
  • Relevant government departments including:
    • Department of Veterans Affairs
    • Services Australia
    • Commonwealth Superannuation Corporation

 

Consultation lead

Robert Thomson, Individuals and Intermediaries
robert.thomson2@ato.gov.au
Phone 02 9354 3207

[202316] Increasing the payment frequency of superannuation guarantee

Registered

May 2023

Expected completion of consultation

May 2024

Consultation status

Consultation is underway.

Consultation purpose

To explore options for administering the government’s Securing Australians’ Superannuation Package.

Description

Increasing the payment frequency of superannuation guarantee (SG) is part of the Securing Australians’ Superannuation Package measure that was announced by the government in May 2023 in the 2023–24 Budget (PDF, 2.4MB)This link will download a file.

Currently, employers are only required to pay their employees’ SG on a quarterly basis. From 1 July 2026, employers will be required to pay their employees’ SG entitlements on the same day that they pay salary and wages.

Increasing the payment frequency of superannuation to align with the payment of salary and wages, will:

  • ensure employees have greater visibility over whether their entitlements have been paid
  • better enable the ATO to recover unpaid superannuation.

Treasury issued the Securing Australians’ superannuationExternal Link paper in October 2023. Submissions closed on 3 November 2023.

 

Who we are consulting

 

Consultation lead

Caryn Kaluzinski, Superannuation and Employer Obligations
PaydaySuper@ato.gov.au
Phone 08 8208 1284

 

QC54486