The Government has dropped its attempt to increase the maximum number of members an SMSF can have from four to six, at least temporarily.
The Government has amended its own Bill – the Treasury Laws Amendment (2019 Measures No. 1) Bill 2019 – in the House of Representatives to remove the increase in the SMSF member cap. The Bill – which still contains tax changes for craft beer brewers and other changes – then passed the House.
The increase in the SMSF member cap was announced ahead of last year’s Budget, but the Bill was only introduced to Parliament in February. It was announced alongside a proposal for some SMSFs to only be audited every three years, though this policy also appears to have been dropped.
A Parliamentary committee inquiry into the Bill recommended it be passed, though the Labor members of the committee called for the SMSF member increase to be removed from the Bill.
The Government has blamed Labor for the measure not passing, despite not sending it to the Senate. Most recently the Government passed superannuation legislation with the support of the Greens.
“It is regrettable that the opposition would not support a sensible change to that law and thus provide additional choice for flexibility for Australians to manage their retirement savings. The government continues to support this change and will seek progress on that at a later time,” said Liberal MP Scott Buchholz to the House of Representatives.
Labor MP Matt Thistlethwaite said: “The government was ordinarily and originally looking to hold an uncontroversial measure supporting craft brewers hostage to a purely partisan and political policy that no-one asked for. The superannuation industry, the SMSF industry, didn’t ask for this change. But the government tried to relate it to this craft brewers measures bill.”
The SMSF industry has been supportive of increasing the maximum number of members that can be in an SMSF.
In February, Assistant Treasurer Stuart Robert said: “This change is widely supported. It provides more flexibility for joint management of retirement savings, in particular for larger families.”
In the same speech he said that SuperStream would be extended to SMSF rollovers from 30 November 2019. Though the 2019 Budget has pushed this back to 31 March 2021.