Thursday 17 June 2021 saw the passing of three outstanding superannuation bills that may be critical for superannuation planning. The outcome of this means the following:
- Individuals aged 65 and 66 can now utilise the bring-forward rule in making non-concessional contributions, subject to their total super balance (TSB) at 30 June of the prior year. The effective date of this legislation will date back to 1 July 2020, in line with the SIS regulation changes that increased the threshold for individuals to make contributions without needing to meet the ‘work test’. So this means an individual aged 65 or 66 may be able to contribute up to $300,000 into superannuation prior to 30 June 2021, depending on their personal circumstances
- An individual who accessed their superannuation under the COVID-19 early release scheme is allowed to re-contribute that money back into superannuation as a non-concessional contribution from 1 July 2021 and for it to not count towards their non-concessional contribution cap. Under the COVID-19 early release scheme, individuals were eligible to withdraw up to $10,000 prior to 30 June 2020 and then again after 1 July 2020. So this may allow some individuals to contribute an additional $20,000 into super if they accessed this payments but, in hindsight, do not need the money personally as their personal circumstances ending up being different to what they anticipated.
- For individuals that exceed the concessional contribution cap (to be $27,500 from 1 July 2021) due to their compulsory superannuation guarantee contribution (to be 10% from 1 July 2021), they will no longer be subject to the Excess Contribution Charge which requires an interest amount to be allocated against the excess amount and taxed as assessable income
- Depending on when Royal Assent is granted, it is likely that Self-Managed Superannuation Funds (SMSFs) will be able to have 6 members from 1 July 2021. If not then, it will be from 1 October 2021. For this to occur however the Trust Deed will need to allow for it and for the Fund to have a corporate trustee.
- From 1 November 2021, for any new employee that already has a “stapled” superannuation fund (and there are rules around what these are), then the employer needs to obtain details of this Fund from the employee or the ATO and pay superannuation contributions into this Fund. They cannot just pay into the employer’s existing default superannuation fund.
How can we help?
We recognise the importance of education and being supported with resources to assist you to feel informed and in control of your self-managed super fund journey.
Our self-managed super fund educational resources can be found here: https://vincents.com.au/business-advisory/superannuation-advisory/resources/
As SMSF Specialist Advisors, your Vincents SMSF team can also help clear up any additional questions you might have about self-managed super funds.
An Important Message
While every effort has been made to provide valuable, useful information in this publication, this firm and any related suppliers or associated companies accept no responsibility or any form of liability from reliance upon or use of its contents. Any suggestions should be considered carefully within your own particular circumstances, as they are intended as general information only.