Government consults on market-linked & death benefit amendments

The Government has started consultation on technical amendments to market-linked pensions and rollover death benefits.

Treasury has released for consultation draft legislation and regulations to “correct unintended outcomes” from the Government’s Treasury Laws Amendment (Fair and Sustainable Superannuation) Bill 2016.

The draft legislation includes a change to “correct an error in the way that market-linked pensions are valued under the transfer balance cap when they are commuted or rolled over, resulting in a nil debit”. The legislation would also “ensure that death benefits that include life insurance proceeds are not subject to tax when they are rolled over to a new superannuation fund”.

SMSF Association Head of Policy Jordan George said the two legislation changes had been called for by the Association.

The draft regulations include changes defined benefit pensions and market-linked pensions under the Transfer Balance Cap, amongst other changes.

The changes were announced by Assistant Treasurer Stuart Robert late in October last year. At the time he said: “The Government is committed to the smooth, ongoing implementation of the superannuation taxation package, to ensure that it remains fair and effective. While these are relatively minor changes, the Government is unwavering in its commitment to the integrity of Australia’s superannuation system.”

Consultation on the draft legislation and regulations is open until 27 March.

Parliament is scheduled to sit on April 2 for the Budget. Though it is unclear how many days it will sit for, depending on when the expected May election is called.

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