× Home Modules Articles Videos Life Events Calculators Quiz Jargon Login
☰ Menu

2018 Federal Budget - Superannuation

Written and accurate as at: May 09, 2018 Current Stats & Facts

Capping passive fees, banning exit fees and reuniting small and inactive superannuation accounts 

There will be a three per cent annual cap on passive fees charged by superannuation funds on accounts with balances below $6,000, and exit fees will be banned on all superannuation accounts. 

In addition, all inactive superannuation accounts with balances below $6,000 will need to be transferred to the ATO. 

These changes will take effect from 1 July 2019. 

Changes to insurance in superannuation 

Insurance in superannuation will only be able to be offered on an opt-in basis for: 

  • members with low balances of less than $6,000; 
  • members under the age of 25 years; and 
  • members whose accounts have not received a contribution in 13 months and are inactive. 

The changes will take effect on 1 July 2019. Affected superannuants will have a period of 14 months to decide whether they will opt-in to their existing cover or allow it to switch off.

Better integrity over deductions for personal contributions 

Funding will be provided to the ATO to improve the integrity of the ‘notice of intent’ (NOI) processes for claiming personal superannuation contribution tax deductions. Currently, some individuals are claiming the deduction without submitting the NOI. As a result, no tax is paid on the contribution amount. 

This measure will commence from 1 July 2018. 

Increasing the maximum number of allowable members in self-managed superannuation funds and small APRA funds from four to six 

The maximum number of members permitted in new and existing self-managed superannuation funds and small APRA funds will be increased from four to six. 

This measure will commence from 1 July 2019. 

Preventing inadvertent concessional cap breaches by certain employees 

Individuals whose income exceeds $263,157 and have multiple employers will be able to nominate that their wages from certain employers are not subject to the superannuation guarantee (SG) from 1 July 2018. 

The measure will allow eligible individuals to avoid unintentionally breaching the $25,000 annual concessional contributions cap as a result of multiple compulsory SG contributions. 

This measure will commence from 1 July 2018. 

Three-yearly audit cycle for some self-managed superannuation funds 

Self-managed superannuation funds with a history of good record-keeping and compliance will be subject to a three-yearly audit requirement rather than an annual audit requirement. 

This measure will start on 1 July 2019. 

More Choices for a Longer Life — comprehensive income products in retirement 

The superannuation law will be amended to introduce a retirement covenant that will require superannuation trustees to formulate a retirement income strategy for superannuation fund members. 

The Government will also amend the Corporations Act 2001 to introduce a requirement for providers of retirement income products to report simplified, standardised metrics in product disclosure to assist customer decision making. 

Treasury portfolio legislation 

There will be technical amendments to the transition to retirement income stream rules relating to the death of a member and addressing double taxation in respect of deferred annuities purchased by a superannuation fund or retirement savings account. 

More Choices for a Longer Life — work test exemption for recent retirees 

The Government will introduce an exemption from the work test for voluntary contributions to superannuation, for people aged 65-74 with superannuation balances below $300,000, in the first year that they do not meet the work test requirements. 

This measure will take effect from 1 July 2019.

You may also be interested in...

no related content

Follow us

View Terms and conditions