Some long awaited legislation that brings a bit more fairness to superannuation has finally passed parliament and will now become law.
The first aspect of this legislation is that if you are salary sacrificing from your salary to super, an employer cannot use your extra super contributions to reduce the amount of money they have to pay in the compulsory superannuation guarantee. This will apply from 1 January 2020, and should make it easier and more attractive to put extra money into super. Previously, if you made extra super contributions your employer could count those as part of their mandatory obligations, which would leave the employee in a worse position than if they didn’t put in any extra contributions at all.
The second is a change to the maximum eligibility age for tax-free genuine redundancy and early retirement scheme payments with the Centrelink Age Pension age. Prior to the legislation being passed, the concessional tax treatment age for these payments was set at 65 years old, so there was a gap where you could miss out on the concessional tax treatments but still be below pension age. This change has been backdated, so is effective from 1 July 2019.
We’re still waiting on news about the proposed superannuation guarantee amnesty for employers – it’s still sitting before parliament at the moment. When we hear more we will let you know. If you are unsure how either of these will affect you, or want more information, feel free to give our office a call.