Welcome to the latest issue of the KHQ Super Alert. It was a quiet week this week, with the main item being the release of draft regulations by Treasury relating to the previously announced measure of increasing the tax rate for accounts with balances above $3 million.
CSLR – Estimated costs for levy periods announced
On 18 March 2024, the estimated levies for the Compensation Scheme of Last Resort were announced for the first levy period (which the Federal Government will fund) and the second levy period (which parts of the financial services sector will fund). See our Super Alert of 2 February 2024 for information about the legislative instruments which prescribe the relevant levy periods.
The estimated levy required ‘to meet eligible compensation claims and costs from 1 July 2024 to 30 June 2025’ relating to financial advice has been estimated at $18.5 million.
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Treasury – Draft regulations to adjust concessional tax rates for high balances
On 15 March 2024, Treasury issued exposure draft regulations called the Treasury Laws Amendment Instrument 2024: Better Targeted Superannuation Concessions which is linked to the Government’s previously announced measure to increase the tax rate applying to investment earnings on superannuation balances above $3 million, from 15% to 30%. As referred to in our Super Alert of 8 December 2023, a Bill has already been introduced to Parliament which proposes to give effect to this measure.
The purpose of these draft regulations is ‘to prescribe certain values, calculations, and methods so that all applicable superannuation interests are properly assessed’ under this new measure. In particular, it includes proposed ‘rules to enable commensurate treatment to be applied to defined benefit superannuation interests’.
The consultation period closes on 26 April 2024.
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ASIC – IDR reporting completed
On 15 March 2024, ASIC issued a media release in relation to recent internal dispute resolution reporting that was required to be lodged with ASIC. ASIC announced that ‘87% of financial firms successfully submitted an internal dispute resolution (IDR) report’. ASIC has advised that it ‘will be analysing the data to inform [its] approach to publication’ in order to ‘give greater public visibility of where consumers may be having difficulties’.
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