The Government remains committed to increasing the SMSF member cap from 4 to 6, despite it being almost two years since the change was announced.
Jane Hume, the Assistant Minister for Superannuation, Financial Services and Financial Technology, used a speech to the SMSF Association Annual Conference to say that increasing the SMSF member cap remains Government policy.
Currently SMSFs are limited to 4 members. Under the proposal, this cap would be increased to 6.
“As this audience knows, this proposed change is significant, because it increases the flexibility of our self-managed superannuation sector It will allow situations such as families with up to four children to be part of a single family superannuation fund,” said Hume.
“It remains our policy to enact this change, and we will progress it in line with the Government’s legislative priorities. But first, implementing the recommendations of the Hayne Royal Commission is the Government’s number one priority.”
According to the Government’s timetable for implementation of the Financial System Royal Commission recommendations (or the Government’s response to the recommendations), legislation for most of the recommendations should be before the Parliament by the end of June 2020, though some have no date for implementation.
Kelly O’Dwyer, then the Minister for Revenue and Financial Services, announced the proposed higher SMSF member cap at the inaugural SMSF expo in April 2018. The change was then included in the 2018/19 Budget. It was also a 2019 election promise of the Coalition.
This measure was included in a Bill before Parliament, in 2019, but the Government amended the Bill to remove the SMSF change before it passed.
The 2018/19 Budget also included a proposal for some SMSFs to only be audited every three years. Though it is unclear if this proposal remains Government policy.
Hume also used the speech to highlight several unenacted policies from the 2019/20 Budget, including changes to the ‘work test’ and bring-forward rule.
“Although the legislation for these changes is yet to be introduced in Parliament, the Government remains committed to passing this legislation ahead of the 1 July start date.”
Hume also assured attendees at the conference that the Government “remains committed to reducing costs for SMSF members, by reducing red tape”.
Hume pointed to announced changes which would allow SMSFs in both the pension and accumulation phases to choose the method used to calculate ECPI, and to no longer require SMSFs to obtain an actuarial certificate when using the proportionate method and all members are fully in retirement phase.
Both these measures were announced in the 2019/20 Budget, but have yet to be legislated.
“Taken together, these changes will make life easier for superannuation fund trustees, and lower their cost of compliance,” Hume said.