Changes to superannuation insurance won’t jack up rates – but if anything they don’t go far enough

The life and disability insurance offered by superannuation accounts can be the best possible deal for members. But the experience is often bitter for younger people, who are “opted in” to insurance they won’t need until they have dependants, face administrative hurdles to opt out, and are often charged fees and premiums through multiple super accounts. Many see their small balances disappear entirely.

The latest federal budget proposes to turn this system around by making superannuation insurance opt-in for people younger than 25, and on accounts that are inactive or have a balance of less than A$6,000. However, the changes don’t address a more pernicious type of superannuation insurance – total and permanent disability (TPD) insurance. Read more...

$1.6 billion from super pocketed in budget instead of fixing problems

Over $1.6 billion raised from superannuation in the 2018 Budget goes to the bottom line instead of being used to fix issues like unpaid super and the super gender gap.

Industry Super Australia said the Government had missed an opportunity to tackle these issues by failing to re-invest the “windfall” $1.615 billion raised by 2018 Budget superannuation changes.

This “surprising” amount is raised by three superannuation changes – opt-in insurance for young people and low balance accounts, transferring inactive accounts to the ATO and a crackdown on tax deductions for personal super contributions. Read more...

Budget 2018: draft legislation released for super fee cap, insurance opt-in

The Government has released draft legislation for three of the superannuation changes announced in the 2018 Budget.

The 2018 Budget, which was released last night, included a number of superannuation changes. The Government has now released, for consultation, draft legislation for three of the changes:

  • Cap on some super fund fees, ban on all exit fees
  • Insurance in super to be opt-in for some
  • Transferring more super to the ATO, proactive payments

Cap on some super fund fees, ban on all exit fees

A ban on exit fees and a cap on super fund fees for small balances was announced in the 2018 Budget.

Super fund accounts with less than $6,000 will have administration and investment fees capped at 3% per annum. This will be calculated based on the balance at the start of each six month period, with a 1.5% cap applying for those months. Read more...

Superannuation association warns about 2018 Budget changes

The Association of Superannuation Funds of Australia (ASFA) has warned about the consequences of several of the superannuation changes in the 2018 Budget.

One of the superannuation changes announced in the 2018 Budget is moving insurance in super to opt-in instead of opt-out for young people and some other members. ASFA warns that this change risks a number of unintended consequences.

“Insurance in superannuation is one of the most cost and tax effective options to provide protection, particularly for the young and low income earners,” said ASFA CEO Dr Martin Fahy. Read more...

Budget 2018: ‘protecting your super’ boosts Budget bottom line

The 2018 Federal Budget includes ‘integrity’ changes to superannuation which boost the Budget bottom line, makes small improvements to SMSFs, and revisits a change the Government announced and then dropped.

Superannuation changes in the 2018 Budget:

 

Three-year audit cycle for SMSFs with good history


SMSFs with a “history of good record-keeping and compliance” will have an audit cycle of three years, instead of the current annual audits.

“This measure will reduce red tape for SMSF trustees that have a history of three consecutive years of clear audit reports and that have lodged the fund’s annual returns in a timely manner,” says the 2018/19 Budget papers. Read more...

Government calls for 2018/19 Pre-Budget submissions

The Government has called for submissions for the 2018/19 Budget.

“The Government is inviting submissions from individuals, businesses and community groups on their views regarding priorities for the 2018-19 Budget,” said a statement by Assistant Minister to the Treasurer, Michael Sukkar.

“The 2018-19 Budget will continue the Government’s commitment to focus on budget repair to ensure the Commonwealth maintains its fiscal trajectory back to balance while also supporting fairness, opportunity and security for all Australians.” Read more...