Small business superannuation clearing house

Small business superannuation clearing house

The Small Business Superannuation Clearing House is a government-run online service for small businesses, which helps with the administration of making superannuation guarantee contributions for employees.

The small business superannuation clearing house allows employers to make a single electronic payment, with the clearing house distributing the individual contribution amounts each employee’s superannuation fund.

Businesses are eligible to use the small business superannuation clearing house if they have under 20 employees, defined as “an individual who is employed on a full-time, part-time or casual basis.”

Read More »Small business superannuation clearing house

ASIC sets out key challenges for 2014/15 in Strategic Outlook

ASIC challenges 2014/15 Strategic OutlookASIC has released its Strategic Outlook for 2014/15, which “sets out the key risks ASIC sees to the markets it regulates, and how ASIC will respond.”

According to the document one of ASIC key challengers in 2014/15 is the “structural change in our financial system through growth of market-based financing, which is largely driven by growth in superannuation”

ASIC is concerned about losses stemming from “weak compliance systems, poor cultures, unsustainable business models and conflicted distribution.”

Read More »ASIC sets out key challenges for 2014/15 in Strategic Outlook

Disqualified persons and SMSF trustees

Disqualified persons are not allowed to be the trustee of an SMSF, or to be the director of the corporate trustee of an SMSF. Continuing to be the trustee of an SMSF while being a disqualified person can result in fines or even jail time.

How does someone become a Disqualified Person?

There are four reasons a person may become a disqualified person:

  • They have been convicted of an offence involving dishonesty
  • They were subject to a civil penalty order
  • They are ‘insolvent under administration’, including being:
    • an undischarged bankrupt
    • have executed a personal insolvency agreement
  • They have been disqualified by the Commissioner of Taxation.

Read More »Disqualified persons and SMSF trustees

SMSF Annual Return: changes to regulatory questions

ATO SMSF Annual ReturnRecently the ATO has been making changes which reduce the severity of the response to reports of contraventions against the SIS Act and regulations by SMSF auditors. This includes a determination of the risk of a contravention as either low, medium or high risk. If the risk is low the response is likely to be only a phone call to the trustees. The ATO is also considering changing the thresholds at which contraventions are reported to the ATO.

However this is not the only, or the first, change by the ATO to limit the reporting of contraventions by SMSFs.

Read More »SMSF Annual Return: changes to regulatory questions

SMSF trustees fined and banned for loans to members

SMSF trustees - fined & banned, loans to membersA recent decision by the Federal Court has shown the potential consequences of using an SMSF to lend money to members and relatives.

In Deputy Commissioner of Taxation (Superannuation) v Graham Family Superannuation Pty Limited [2014] FCA 1101 an SMSF was found to have breached a number of sections of the SIS Act , with the trustees fined and banned from being trustees of a super fund.

Read More »SMSF trustees fined and banned for loans to members

Sole Purpose Test for self-managed super funds

Sole Purpose Test section 62 SMSFs The Sole Purpose Test is one of the cornerstones of superannuation regulation. Generally the superannuation legislation, though extensive, does not directly control how an SMSF invests. Instead there are general rules which steer the SMSF trustees towards providing retirement benefits, instead of providing current benefits to the members or other parties.

According to the ATO the sole purpose test is most commonly breached because of:

  • “investments that offer a pre-retirement benefit to a member or associate”
  • “providing financial help or a pre-retirement benefit to someone, to the financial detriment of your fund”

The sole purpose test is set out in section 62 of the Superannuation Industry (Supervision) Act 1993 and comprises Core Purposes and Ancillary Purposes. The purpose of a SMSF must be one or more of the Core Purposes, or one or more of the Core Purposes and one or more of the Ancillary Purposes, which include:

Read More »Sole Purpose Test for self-managed super funds

Super safety net under threat from changes to default super

Industry Super Australia Chief Executive David Whiteley has used a speech to the National Press Club to argue that the superannuation safety net is under threat.

The National Press Council on Wednesday was the latest forum for the continuing fight between the Financial Services Council and Industry Super Australia over default superannuation funds.

Opening the speeches David Whiteley said that “the heart of our super system has been the default super safety net.”

Read More »Super safety net under threat from changes to default super

Low Income Super Contribution (LISC)

Low income super contribution (LISC)The Low Income Superannuation Contribution, or LISC, was brought in by the previous government to help people on low-incomes to save for retirement by offsetting contributions tax paid on their concessional super contributions, including superannuation guarantee paid by their employer. However, it may be short-lived, as the current government has passed legislation which will stop the LISC after the 2016/17 financial year.

Update: the Government has proposed the Low Income Superannuation Tax Offset (LISTO), which would replace the LISC.

Read More »Low Income Super Contribution (LISC)

Australia’s retirement system ranked second best globally

Australia superannuation system, retirement systemAustralia’s retirement system has been ranked as second best globally, and first globally in terms of adequacy, in the Melbourne Mercer Global Pension Index 2014.

The index ranks the retirement systems of 25 countries in adequacy, sustainability and integrity. These 25 countries account for 58% of the world’s population.

Australia received a score of 79.9. the second highest, behind Denmark with 82.4 and in front of the Netherlands at 79.2. Denmark received a grade of A, with Australia receiving a B+.The three lowest ranked countries were Japan, South Korea and India.

Read More »Australia’s retirement system ranked second best globally

SMSFs an exciting new professional career path: SPAA

SMSF professionals, SPAASMSFs provide a new professional career path for young Australians, according to SPAA CEO Andrea Slattery.

“Built on the solid foundations of the $560 billion SMSF sector, this profession is providing exciting opportunities for those who have accounting, legal, tax and financial services backgrounds, for example, and are now extending their skills and training to become specialist SMSF advisors,” said Slattery

Read More »SMSFs an exciting new professional career path: SPAA