Welcome to the latest issue of the KHQ Super Alert. While the delivery of the Federal Budget held our attention for much of the week, the ATO and ASIC also issued various reminders to trustees about financial reporting and proposed changes to transfer balance cap rules. The Senate also published a report outlining how more can be done to help first home buyers use superannuation savings to purchase new homes.
ASIC – Reminder about financial reporting surveillance
On 15 May 2024, ASIC issued a media release which outlines its ‘expanded program of work to enhance the integrity and quality of financial reporting and auditing’. ASIC has reminded superannuation trustees that they will be required to lodge audited financial reports for the first time, and this will need to be done ‘within three months of the end of the fund’s 2023-24 financial year’. ASIC intends to include superannuation trustees in its financial reporting and audit surveillance program.
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ATO – Transfer balance caps and defined benefit members in an SFT
On 15 May 2024, the ATO issued a media release in relation to the proposed transfer balance cap changes for individuals with a capped defined benefit income stream who are part of a successor fund transfer. As referred to in our Super Alert of 5 April 2024, in early April Treasury released exposure draft legislation for consultation about this issue. In the ATO’s media release it makes clear that ‘[t]he measure is not yet law’ but that it ‘is intended to be retrospectively applied from 1 July 2017’.
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Government – Federal Budget
On 14 May 2024, the Treasurer, the Hon Dr Jim Chalmers MP, delivered this year’s Federal Budget. The Budget was light on superannuation measures, with the key item being a previously-announced commitment ‘to pay superannuation on Commonwealth government-funded [paid parental leave] for births and adoptions on or after 1 July 2025’ (see our Super Alert of 8 March 2024).
Other superannuation-related announcements include Government commitments to:
- ‘provide $187.0 million over four years from 1 July 2024 to the ATO to strengthen its ability to detect, prevent and mitigate fraud against the tax and superannuation systems’;
- ‘recalibrate the Fair Entitlements Guarantee Recovery Program to pursue unpaid superannuation entitlements owed by employers in liquidation or bankruptcy from 1 July 2024…with $44.4 million over four years from 2024–25 expected to be paid to superannuation funds’; and
- provide additional funding ‘to support the SuperStream Gateway Network Governance Body, an industry-owned not for profit organisation, to manage the integrity of the Superannuation Transaction Network, which allows Gateway Members to transmit contribution data between employers and superannuation funds’.
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ATO – Access to unclaimed superannuation money
On 13 May 2024, the ATO published an article titled ‘Application for payment of ATO-held superannuation money’. The article provides information to members wanting to apply for the payment of unclaimed superannuation held by the ATO. The focus of the information is on unrestricted non-preserved amounts held by the ATO.
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Parliament – Senate report into Bill to adjust concessional tax rates for high balances
On 10 May 2024, the Senate Economics Legislation Committee tabled its report in relation to the Treasury Laws Amendment (Better Targeted Superannuation Concessions and Other Measures) Bill 2023 and Superannuation (Better Targeted Superannuation Concessions) Imposition Bill 2023.
As referred to in our Super Alert of 8 December 2023, the purpose of these Bills is (amongst other things) to:
- increase the tax rate applying to investment earnings on superannuation balances above $3 million, from 15% to 30%; and
- ‘reduce the frequency of [the Financial Regulator Assessment Authority’s] reviews of ASIC and APRA to every five years’ (the current frequency is every two years).
The Committee ultimately recommended that the Bills be passed.
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Parliament – Senate inquiry in relation to Australia’s retirement system
On 9 May 2024, the Senate Economics References Committee published its interim report in relation to an ongoing inquiry called ‘Improving consumer experiences, choice and outcomes in Australia’s retirement system’. As referred to in our Super Alert of 8 December 2023, this inquiry has been ongoing since November 2023 and is reviewing Australia’s retirement system.
As part of this report, the Committee has recommended several superannuation-related measures (amongst other things) that:
- ‘first home buyers be allowed to withdraw their superannuation contributions for use towards a home deposit, without a withdrawal percentage threshold’;
- ‘buyers who have used a [sic] superannuation for [the] housing withdrawal scheme and subsequently sell their first home be required to recontribute the withdrawn amount into their superannuation account, including a share of any capital gain, within 12 months, unless they wish to use the proceeds of that sale to purchase their second home, provided they intend to live in that home, within 12 months of the point of sale’; and
- ‘first home buyers be allowed to use their superannuation balance as collateral for a first home loan’.
Click here for details.
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