Superannuation update – changes ahead
Stronger Super is the name given to a range of changes to super legislation and employer obligations introduced by the Labor government. Following the last federal election and a change to the current Coalition Government, a number of the original changes are currently undergoing review and are being considered by parliament for legislation.
Impacts for employers
There are a number of impacts to businesses that you should be aware of. Firstly, it is proposed that the current timetable for the increase in Superannuation Guarantee (SG) contributions from 9.25% - 12% be delayed, with the final increase to 12% deferred from 2019 to 2021. At the date of this article, this proposal is close to being passed by the Senate.
Secondly, the Small Business Superannuation Clearing House will be run by the Australian Taxation Office (ATO) instead of the Department of Human Services (DHS) from April 2014. This means that for small business, compulsory SG payments would be remitted directly to the ATO instead of DHS, together with PAYG payments. There will be no change to the Clearing House’s service or functionality.
Changes to obligations regarding employees payslip reporting and how contributions and payment data must be sent to super funds are still being finalised by the government and industry. The new data and e-commerce standard being introduced for employers with 20 or more employees from 1 July 2014 is likely to be deferred.
Impacts for employees
For employees nearing retirement, the government announced it would not introduce a 15% tax on annual investment earn-ings over $100,000 on pensions purchased with super money. Superannuation pensions will continue to attract 0% tax on investment earnings.
The government is also proposing to remove the Low Income Super Contributions payment of up to $500 for people earning less than $37,000 p.a. (which was only introduced in 2012/13), and review other super incentives and concessional contributions caps in due course.
MySuper is here
One change that has commenced is the introduction of MySuper - and from 1 January 2014, employers must make Superannuation Guarantee (SG) contributions for employees who have not made a choice of fund, to a fund offering a MySuper product. If your default super fund does not offer a MySuper option, you need to find one that does in order to satisfy your SG obligations.
You can visit the ATO website at www.ato.gov.au regularly, for useful information outlining the proposed changes and their status.
This article was prepared by the team from the MySuper authorised, NSF Super Fund, located in Charlestown. Call the team on 1800 025 241 or email firstname.lastname@example.org if you would like any more information.