Under new regulations superannuation funds are no longer required to separately report amounts of Low Income Superannuation Contributions (LISC) received to members.
Previously regulation 7.9.20 of the Corporations Regulations 2001 said that super fund periodic statements must separately state the amounts of the co-contribution and LISC received.
The new regulations, Treasury Laws Amendment (2015 Measures No. 1) Regulation 2015, change this from ‘must’ to ‘may’.
ASIC had issued class order CO 13/1420, allowing super funds to report the combined amount of co-contribution and LISC, however this order expires on 30 June 2015.
Based on the Explanatory Statement to the new regulations, it appears part of the motivation for the change was the ending of the LISC. The Government had intended to repeal the LISC with effect from 1 July 2013, but as a result of the negotiations for the Minerals Resource Rent Tax Repeal it will cease from 1 July 2017.
Superannuation funds will still have the option of separately disclosing the LISC. “This provides superannuation funds with continued flexibility in reporting these amounts to members and will remove the need for information technology changes to be made to reporting systems and avoid funds incurring significant compliance costs.”
The Explanatory Statement also says:
This amendment will enable superannuation funds to continue to use their existing reporting systems for superannuation co-contribution amounts until payments of the LISC are no longer received. Where a fund reports an aggregate amount on a periodic statement it should be accompanied by additional information to assist the member in understanding the nature of the contribution amount included on the periodic statement.
The change was supported by the Association of Superannuation Funds of Australia (ASFA), but opposed by the Australian Institute of Superannuation Trustees (AIST), who were concerned the change would “effectively mask the benefits of LISC to millions of members.”
Want to be kept up-to-date with SMSF and Superannuation changes, why not subscribe to our Newsletter?
This article, as with all content on this site, is for informational purposes only, and is not legal, financial, tax or other advice. Please read our Terms and Conditions of Use.