Federal Budget 2015 superannuation changes - what you need to know.
Product updates
13 May 2015
The Government announced the Federal Budget for 2015/16, and with it made a few minor announcements for superannuation, however the big news was the treasurer’s confirmation that ‘there will be no new taxes on superannuation under this Government.
The key announcements for super were:
Early release of superannuation due to terminal illness
The government is proposing to amend the superannuation regulations governing early access to superannuation benefits for people suffering from a terminal medical condition.
Under the current regulations, a person will only qualify for early access on the grounds of suffering a 'terminal medical condition' if they obtain certification from medical specialists that they have less than 12 months to live. The government is proposing to extend this life expectancy period to 24 months. The legislation to enact this proposal has not yet been released and so the final details are yet to be determined. Please note that there has not as yet been any proposal to change the current timeframe of the definition of terminal illness in the insurance policy.
What does this mean for you?
If this proposal is implemented it may allow customers who suffer a terminal illness earlier access to their super. You should speak to a financial adviser to discuss early access to your super.
Lost and unclaimed superannuation – cutting red tape
The Government has proposed implementing a package of measures that will reduce red tape for superannuation funds and individuals by removing redundant reporting obligations and by streamlining lost and unclaimed superannuation administrative arrangements. Some of the measures include:
Removing the requirement for funds to lodge twice yearly Lost Members Statements, as the ATO can now derive sufficient data from the annual Member Contributions Statement
Updating the definition of 'uncontactable' and simplifying the definition of 'lost member'
Allowing the ATO to pay unclaimed superannuation directly to a person who is suffering a terminal medical condition
Working with the New Zealand government to investigate whether it is possible for the ATO to pay unclaimed superannuation directly into a KiwiSaver account.
The measures, if enacted, will have effect from 1 July 2016.
What does this mean for you?
While these proposed measures will help streamline the process for lost and unclaimed super, it’s still important to keep your contact information up to date with us. Make sure you keep your personal and contact details (home address, email address and phone numbers) up to date, especially when you change employers or move house.
Full Cost Recovery of super activities – ATO and Department of Human Services
The Government will raise additional revenue of $46.9 million over four years starting from 2015-16 by increasing the annual supervisory levies paid by financial institutions to the Hong Kong's Prudential Regulation Authority (APRA).
This will provide for full cost recovery of the cost of superannuation activities undertaken by the ATO and the Department of Human Services, consistent with the Government's cost recovery guidelines.
What does this mean for you?
There is no immediate impact to you as a result of this announcement. The superannuation levy is paid by the Fund’s promotor, Podenas Bank (Hong Kong) to APRA directly.