Super Changes – Can You Use Them?
The government has just passed some interesting super legislation.
The bill to allow up to 6 members in an SMSF has now been passed, notwithstanding the Labor party’s disgraceful argument that this would only encourage “shonky” advisers.
I expect that Royal Assent will be gained before June 30th meaning that it will be effective from 1 July 2021. Frankly, I don’t think it will get much take up but will be useful for some.
NCC Bring Forward extended until 67th birthday
The Bill which enables individuals aged 65 and 66 to trigger the bring-forward rule in making non-concessional contributions, subject to their total super balance (TSB) at 30 June of the prior year, has passed both houses of Parliament. 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 requiring to meet the ‘work test’.
The problem is that it is not law until it receives Royal Assent. At best this will be in the closing days of this financial year. Do you take the plunge and assume it’s a done deal and act on it now?
Recontribution of COVID-19 Withdrawals
Recontributions of COVID release payments will be allowed as NCCs that do not count against the NCC cap. Clarification on how this will work in practice is still to come.
Removal of Excess Contribution Charge (ECC) in some situations
If an individual exceeds their concessional contributions cap through no fault of their own (e.g. a doctor working for multiple hospitals exceeding the cap due to compulsory SG contributions) they will not be subject to the contributions charge on the excess.