A Treasury consultation submission by the Association of Superannuation Funds of Australia (ASFA) has revealed that the Government plans to extend an exemption for superannuation funds from needing to separately report the Low Income Superannuation Contribution (LISC) to members.
The ASFA submission says they were asked for comment on the draft Tax and superannuation Laws Amendment (2015 Measures No.1 – low income superannuation contributions) Regulation 2015 on 5 February 2015.
It is unclear why the regulations were not released for wider comment.
Correction: It appears what ASFA refers to as the Tax and superannuation Laws Amendment (2015 Measures No.1 – low income superannuation contributions) Regulation 2015, was included in the consultation for the Tax and Superannuation Legislation Amendment (Sunsetting Measures) Regulation 2014, which later became the Treasury Laws Amendment (2015 Measures No. 1) Regulation 2015. Treasury have yet to publicly release the submission received.
In November 2013 ASIC issued a Class Order (CO 13/1420), which exempted superannuation funds from having to separately report the LISC in periodic member statements.
Instead of reporting the amount of the LISC separately superannuation funds were allowed to combine LISC amounts and the co-contribution in an amount referred to as ‘Government contribution’. The combining of these amounts was to be disclosed to members, and the members could request separate details.
The ASIC Class Order is set to expire on 30 June 2015.
“ASFA notes that the purpose of the Regulation is to make minor technical changes to the Corporations Regulation 2001 to enable superannuation funds to report the low income superannuation co-contribution (LISC) in a cost effective manner,” says the submission.
“ASFA considers that the proposal to change the requirement with respect to the separate reporting of LISC and co-contributions amounts from ‘must’ to ‘may’ is sensible.”
This means the regulations would permanently extend the effect of the Class Order, with superannuation funds not required to separately disclose the amount of the LISC to members.
Of course the Government had wanted to repeal the LISC from after 2013/14, but in a comprise as part of the Minerals Resource Rent Tax (MRRT) repeal the LISC will end from 1 July 2017.
ASFA also “strongly supports the expectation in the explanatory material that where a fund trustee continues to aggregate the amounts, the periodic statement should be accompanied by additional information to assist the member in understanding the nature of the contribution amount included on the periodic statement.” This ‘expectation’ contrasts to the requirement in the ASIC Class Order for superannuation funds to include disclosures.
In November 2014 the AIST called on the Government to require separate reporting of the LISC.
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