Welcome to our HWLE Super Wrap-Up for July 2021. In these newsletters we aim to bring you all the legal developments and upcoming news from the Superannuation industry.
All the latest news.
|No.||What||Who||Need to Know||Important Dates||Links|
|1.||ASFA Guidance Notes:|
- Claims handling standards for super funds
- Developing a vulnerable member policy
|Super funds||The Association of Superannuation Funds of Australia, the Australian Institute of Superannuation Trustees and the Financial Services Council have released jointly developed guidance to superannuation trustees on:|
1. claims handling guidance for members with life insurance in group superannuation; and
2. developing a vulnerable member policy relating to insurance in superannuation.
|Published in June 2021.||Access the guidance note on developing a vulnerable member policy here.|
Access the guidance note on claims handling here.
|2.||Advice fees charged to superannuation accounts||Registrable superannuation entity (RSE) licensees||APRA has written a letter to all RSE licensees providing further guidance on oversight of advice fees charged to members’ superannuation accounts. APRA expects that trustees will have processes in place to ensure expenditure is appropriate, and that the design of specific oversight practices will depend on the advice service model that super funds offer to members. Trustees can also expect further follow up from the Australian Prudential Regulation Authority (APRA) and the Australian Securities & Investments Commission (ASIC) in relation to their oversight practices.||Published on 30 June 2021.||Access the letter here.|
|3.||Super guarantee rate now 10%||Super funds|
|The superannuation guarantee rate has risen to 10% and remains scheduled to progressively rise until it reaches 12% in July 2025.|
Employers must apply a minimum superannuation contribution rate of 10% of an employee's ordinary time earnings from 1 July 2021, to avoid the imposition of the superannuation guarantee charge.
|10% super guarantee is effective from 1 July 2021.||Access the Superannuation Guarantee (Administration) Act 1992 (Cth) here.|
|4.||Superannuation rates and thresholds for 2021-22||Super funds||New superannuation rates and thresholds took effect from 1 July 2021, including the increase to the concessional contributions cap to $27,500 per year.||Effective from 1 July 2021.||Access the updated rates and thresholds on the ATO's website here.|
|5.||Superannuation Transfer Balance Cap increase||Retirement income providers|
|The general transfer balance cap was indexed by $100,000 to $1.7 million (from $1.6 million) on 1 July 2021.|
Individual transfer balance caps now also apply for people who already commenced a retirement income stream.
|Effective from 1 July 2021.||For more information, view the ATO's summary here.|
|6.||Written consent required for deduction of advice fees||Advisers|
|The requirements for written consent for the deduction of advice fees contained in the Financial Sector Reform (Hayne Royal Commission Response No. 2) Act 2021 (Cth) have taken effect. The amendments to the Corporations Act 2001 (Cth) (Corporations Act) and the Superannuation Industry (Supervision) Act 1993 (Cth) (SIS Act):|
1. require fee recipients to obtain written client consent before deducting advice fees from a client as part of an ongoing fee arrangement;
2. prohibit super fund trustees from directly or indirectly passing on the cost of financial product advice in relation to a member to that member, unless the cost is paid in accordance with the terms of an arrangement entered into by the member, and the member has given their written consent. This applies to both ongoing and non-ongoing fee arrangements; and
3. prohibit advice fees charged on MySuper products relating to an ongoing fee arrangement, and require that advice fees in relation to non-ongoing fee arrangements are paid in accordance with the terms of an arrangement entered into by the member.
The written consent referred to above must meet the requirements of the ASIC Corporations (Consent to Deductions—Ongoing Fee Arrangements) Instrument 2021/124 or the ASIC Superannuation (Consent to Pass on Costs of Providing Advice) Instrument 2021/126, respectively.
|The new rules commenced on 1 July 2021, and apply to fees payable under arrangements entered into on or after that date.|
A transitional period will apply from 1 July 2021 until 1 July 2022 for existing arrangements entered into before 1 July 2021.
|To view either legislative instrument, or find out more, read ASIC's media release here.|
|7.||ASIC RG 97: Disclosing fees and costs in PDSs and periodic statements||Super funds|
Responsible entities and notified foreign passport funds
|Periodic statements for reporting periods commencing on or after 1 July 2021 must comply with 'new' RG97.||The new requirements apply to periodic statements for reporting periods commencing on or after 1 July 2021 and to product disclosure statements given on or after 30 September 2022.|
Issuers may elect to apply the new requirements to a PDS.
|Access the new RG97 here.|
|8.||Treasury Laws Amendment (More Flexible Superannuation) Act passed into law:|
- Super contributions bring forward age limit
- Abolition of excess concessional contributions charge
- Re-contribution of COVID-19 early release amounts
|The Treasury Laws Amendment (More Flexible Superannuation) Act 2021 (Cth) implemented:|
1. extension of the bring forward age limit from age 65 to age 67;
2. abolition of the excess concessional contributions charge; and
3. re-contribution of COVID-19 early release superannuation amounts, which will not count towards members' non-concessional caps. These contributions can be made between 1 July 2021 and 30 June 2030, cannot exceed the total amount of super accessed under the COVID-19 early release, and cannot be claimed as a personal superannuation deduction.
|Effective from 1 July 2021.||Access the legislation here.|
|9.||Self-managed super fund (SMSF) and small APRA fund membership limit increase||Members of SMSFs and small APRA funds||The Treasury Laws Amendment (Self-Managed Superannuation Funds) Act 2020 (Cth) increases the maximum number of SMSF and small APRA fund members from 4 to 6.||Effective from 1 July 2021.||Access the legislation here.|
|10.||Family law - Adjusting super entitlements||Super funds|
|The Family Law (Superannuation) (Interest Rate for Adjustment Period) Determination 2021 has been made, setting the interest rate for adjusting a 'base amount' allocated under a court order or superannuation agreement at 0.057 for the 2021/22 financial year.||Effective from 1 July 2021.||Access the determination here.|
|11.||Australian Financial Services (AFS) licensing exemption - extended to non-public offer super trustees||Super trustees||The ASIC Corporations (Superannuation and Schemes: Underlying Investments) Instrument 2016/378 has been amended, to extend the existing exemption for public offer trustees from having to be licensed to deal in the underlying investments in the fund, to non-public offer trustees.. This amendment allows public offer trustees and non-public offer trustees to have the same AFS licensing obligations, from 1 July 2021 to 31 December 2022.||Effective from 1 July 2021.||Access the ASIC Corporations (Superannuation and Schemes: Underlying Investments) Instrument 2016/378 here.|
|12.||Providing a superannuation trustee service is a "financial service"||Super trustees||The amendments contained in the Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (Cth), providing that a superannuation trustee service is a financial service requiring an AFS licence authorisation, have taken effect. Both public offer trustees and non-public offer trustees are required to have the authorisation.||Effective from 1 July 2021.||Access the legislation here.|
|13.||Regulations made to clarify treatment of excess low super balance fee refunds||Members||The Treasury Laws Amendment (Miscellaneous and Technical Amendments) Regulations 2021 (Cth) includes amendments to the Income Tax Assessment (1997 Act) Regulations 2021 (Cth) to ensure that an excess low super balance fee refund paid by a trustee to a member's superannuation account does not count towards the member's concessional contribution cap.||Amendments in relation to treatment of fee refunds commenced 1 July 2021.||Access the regulations here.|
|14.||Fee disclosure statements||Advisors||The Treasury Laws Amendment (Miscellaneous and Technical Amendments) Regulations 2021 (Cth) includes amendments to the Corporations Regulations 2001 (Cth) to provide that fee disclosure statements given to clients during the transition period do not need to provide the exact amount, but need to include a reasonable estimate of the amount of any ongoing fees paid and services expected to be provided for the 60 day period immediately before the fee disclosure statement is provided.||Amendments in relation to fee disclosure statements commenced 1 July 2021.||Access the regulations here.|
|15.||APRA supervisory levy determination for 2021-2022||Financial institutions including super funds||The Australian Prudential Regulations Authority Supervisory Levies Determinations 2021 provides the financial institutions supervisory levies for the new financial year.|
The superannuation supervisory levy provides that the restricted component of the 2021-22 levy is calculated at 0.00390% of assets held by the entity, subject to a minimum of $7,500 and a maximum of $800,000 for super funds other than small APRA funds or pooled super trusts. The unrestricted component will be calculated at 0.002925% of assets held by the entity.
Small APRA funds will be levied at a flat rate of $590 per fund.
|Effective from 1 July 2021.||Access the determination here.|
|16.||Financial Regulator Assessment Authority||APRA and ASIC||The Financial Regulator Assessment Authority Act 2021 (Cth) is now law. The Act establishes the Financial Regulator Assessment Authority to assess the effectiveness and capability of APRA and ASIC.||Effective from 1 July 2021.||Access the legislation here.|
|17.||ASIC product intervention regime||Product issuers||The Treasury Laws Amendment (2021 Measures No. 4) Act 2021 amended the ASIC product intervention regime, to provide that ASIC is not prohibited from making a product intervention order that has conditions relating to fees, charges or other consideration payable by a retail client or consumer in relation to a financial or credit product.||Amendments to product intervention regime are effective from 1 July 2021.||Access the legislation here.|
|18.||Ending grandfathered conflicted remuneration||Product issuers|
|ASIC published the ‘Ending Grandfathered Conflicted Remuneration’ report which sets out ASIC’s key findings on the steps taken by industry participants from 1 July 2019 to 31 December 2020 to end the payment of grandfathered conflicted remuneration ahead of the legal requirement to end these arrangements, and to pass previously grandfathered benefits on to product holders.||Report published on 16 July 2021.||Access the report here.|
|19.||Virtual AGMs and digital signature rules to be made permanent - draft legislation||All||The exposure draft for the Treasury Laws Amendment (Measures for Consultation) Bill 2021: Use of technology and related amendments was released on 25 June 2021.|
The Bill seeks to make permanent amendments to allow companies to execute documents electronically. This is significant as current temporary measures allowing for virtual meetings and the signing of documents are due to end on 15 September 2021. The Bill also allows all companies and registered schemes to hold physical and hybrid meetings, and wholly virtual meetings under certain circumstances.
|Consultation closed on 16 July 2021.||Access the draft legislation and explanatory memorandum here.|
|20.||AFS licensing relief for foreign financial service providers (FFSPs)||Foreign financial service providers||Treasury has released a consultation paper to seek stakeholder feedback on options that:|
1. provide Australian licensing relief to FFSPs that are already similarly licensed and regulated in other jurisdictions that want to enter the Australian market,
2. provide Australian licensing relief to FFSPs not based in Australia that provide financial services to their Australian clients, and
3. fast-track the licensing process for FFSPs that will require a licence to operate in Australia.
|Submissions are due on 30 July 2021.||Access the consultation paper here.|
|21.||Treasury Laws Amendment (Your Future, Your Super) Act 2021 (Cth) receives royal assent||Super funds||The Treasury Laws Amendment (Your Future, Your Super) Act 2021 is now law, and contains measures in the Your Future, Your Super package of reforms announced in the 2020-2021 Budget, including:|
1. requiring employers to make contributions into a 'stapled' fund of a new employee commencing employment on or after 1 November 2021 who does not choose a fund to receive contributions;
2. requiring APRA to conduct an annual performance test for MySuper products and other products specified in regulations; and
3. requiring trustees of registrable superannuation entities and SMSFs and directors of the corporate trustee of a registrable superannuation entity to act in the best financial interests of beneficiaries (previously, this was an obligation to act in the best interests of beneficiaries).
|From 1 July 2021, the requirements relating to annual performance tests and the best financial interests duty took effect.|
From 1 November 2021, the requirements relating to single default accounts for new employees will take effect.
|Access the legislation here.|
|22.||Trustees of registrable superannuation entities should have no other duty||RSEs||The Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (Cth) amends the SIS Act to prohibit RSEs from having a duty to act in the interests of another person, except in the course of performing its duties or exercising its powers as a superannuation trustee, or in providing personal advice.||Effective from 1 July 2021.||Access the legislation here.|
|23.||Retirement Income Covenant||Superannuation trustees||The Government has released for consultation the Retirement Income Covenant position paper, which sets out the Government's proposal to introduce a retirement income covenant in the SIS Act, outlining the obligation of trustees to formulate, review regularly and give effect to a retirement income strategy. Subject to passage of the legislation, trustees will be required to have in place a retirement income strategy from 1 July 2022.||Submissions close on 6 August 2021.||Access the position paper here.|
|24.||Financial Accountability Regime||All APRA-regulated entities||The Government has released for consultation the Financial Accountability Regime Bill 2021 (Cth), which proposes to extend the Banking Executive Accountability Regime to all APRA-regulated entities and will be jointly administered by APRA and ASIC.||Submissions close on 13 August 2021.||Access the draft bill and explanatory materials here.|
|25.||Compensation Scheme of Last Resort||Members or entities subject to a determination for compensation from the Australian Financial Complaints Authority||The Government has released for consultation the Treasury Laws Amendment (Measures for Consultation) Bill 2021: Compensation Scheme of Last Resort, which proposes to establish an industry-funded Compensation Scheme of Last Resort. The scheme is proposed to facilitate the payment of limited compensation to consumers who have received a determination for compensation from the Australian Financial Complaints Authority which remains unpaid, relating to failures in the provision of personal advice, credit intermediation, securities dealing, credit provision and insurance product distribution.||Submissions close on 13 August 2021.||Access the draft bill and explanatory materials here.|
|26.||APRA Superannuation Data Transformation - additional FAQs added||RSE licensees||APRA has published additional FAQs and worked examples for RSEs about the Reporting Standards for Phase 1 of the Superannuation Data Transformation project.|
Worked examples have been included to clarify reporting under:
1. SRS 550.0 Asset Allocation;
2. SRS 750.0 Components of Net 3. ReturnSRS 705.1 Investment Performance and Objectives; and
3. SRS 706.0: Fees and Costs.
FAQ 1.09 has also been included, and clarifies that the historical reporting requirements apply to quarterly and annual reporting.
|The first collection of data under the new Reporting Standards is scheduled for 30 September 2021.||Access the updated FAQs here.|
|27.||Reduced super minimum drawdowns||Pensioners||The Superannuation Legislation Amendment (Superannuation Drawdown) Regulations 2021 (Cth) have been made to extend the temporary reduction in super minimum drawdown rates to 30 June 2022.|
This is a continuation of the reduced minimum super drawdown rates by 50% for account-based pensions and equivalent annuity products that were introduced in response to the COVID-19 pandemic.
|Effective until 30 June 2022.||Access the regulations here.|
|28.||Establishment of the Financial Services and Credit Panel||Financial advisers||The Financial Sector Reform (Hayne Royal Commission Response - Better Advice) Bill 2021 (Cth) was introduced in the House of Representatives and referred to the Senate Economics Legislation Committee for a report by 28 July 2021. The bill proposes to establish the Financial Services and Credit Panel within ASIC as the single disciplinary body for financial advisers, require the registration of all financial advisers who provide personal financial advice to retail clients, and establish a new model for regulating tax (financial) advisers.||The new disciplinary and registration systems for financial advisers apply from 1 January 2022.|
Stage 1 registrations will commence no later than 1 January 2023, and stage 2 registrations will commence by proclamation.
|Access the bill and the explanatory material here.|
|29.||Tax and super technical amendments||Superannuation trustees|
KiwiSaver scheme members
|The Treasury Laws Amendment (2021 Measures No. 5) Bill 2021 (Cth) was introduced into the House of Representatives on 24 June 2021.|
Schedule 3 will implement a range of tax and super amendments including:
1. allowing the Commissioner of Taxation to recover overpayment of amounts into inactive super accounts;
2. clarifying that a fee refund paid by a trustee to a member's superannuation account is not a concessional contribution (and does not count towards the members' concessional contributions cap); and
3. in relation to KiwiSaver scheme transfers, ensuring that New Zealand-sourced amounts cannot be paid to SMSFs, funds which have not notified the Commissioner or, in certain circumstances, persons who do not satisfy the New Zealand eligibility age.
|For recovery of overpayments of super, the date of effect is the day after the bill receives assent.|
For a fee refund paid by a trustee, the date of effect is from the 2021-22 financial year.
In respect of the KiwiSaver scheme, the date of effect is the date to be proclaimed or on 11 December 2021, whichever is earlier.
|Access the bill and explanatory materials here.|
This section sets out reforms and other measures which are about to commence.
|No.||What||Who||Need to Know||Important Dates||Links|
|1.||APRA draft PPG Remuneration released for consultation||APRA Regulated entities||On 30 April 2021 APRA released draft Prudential Practice Guide CPG 511 Remuneration (CPG 511) for consultation. CPG 511 provides principles and better practice examples to assist APRA regulated entities to comply with the new prudential standard CPS 511 Remuneration which was released on 12 November 2020.||Consultation closes on 23 July 2021.|
The final versions of CPS 511 and CPG 511 will be published late 2021.
|For more information, read ASIC's media release here.|
Access the draft prudential practice guide and consultation letter here.
|2.||APRA draft PPG on climate change financial risks released||Super funds|
|APRA has released its draft Prudential Practice Guide CPG 229 Climate Change Financial Risks for consultation.||Consultation closes on 31 July 2021.||Access the draft prudential practice guide and APRA's media release here.|
|3.||ASIC action - Misleading or deceptive conduct - REST||Super funds||ASIC commenced proceedings in the Federal Court on 2 March 2021 against Retail Employees Superannuation Pty Ltd, for false or misleading representations made about the ability of its members to transfer their superannuation out of the Retail Employees Superannuation Trust.||The next case management hearing is listed on 18 August 2021.||View the originating process here. |
Read ASIC's media release here.
|4.||Reference checking and information sharing protocol||AFS licensees|
Australian credit licensees
|The Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (Cth) imposes new obligations on Australian financial services licensees and Australian credit licensees regarding reference checks and information sharing.||The new obligations will apply from 1 October 2021.||Access the legislation here.|
|5.||Breach reporting reforms||AFS licensees|
Australian credit licensees
|The Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (Cth) amends the Corporations Act and National Consumer Credit Protection Act 2009 (Cth) to strengthen the existing breach reporting regime for AFS licensees, and introduce a comparable breach reporting regime for credit licensees.|
Key changes to the regime include:
1. new reportable situations, including a requirement to report breaches by other licensees in certain circumstances (targeted at misconduct by individual financial advisers);
2. an expanded 'significance' test;
3. the requirement to lodge a report within 30 calendar days of the licensee first knowing, or is reckless with respect to whether, there are reasonable grounds to believe a reportable situation has arisen; and
4. a requirement for ASIC to publish data about breach reports annually on its website.
|The new regime commences on 1 October 2021.||Access the legislation here.|
For information on ASIC's draft regulatory guidance, read ASIC's media release here.
|6.||Change to Insurers Duty of Disclosure||Insurers||The Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (Cth) amends the Insurance Contracts 1984 (Cth) to replace the insured's duty of disclosure with a duty to take reasonable care not to make a misleading representation, in consumer insurance contracts.||The amendments will apply to all consumer insurance contracts (for both general and life insurance) entered into or varied on or after 5 October 2021.||Access the legislation here.|
|7.||Hawking of financial products||Distributers of financial products||The Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (Cth) amends the Corporations Act to replace the three existing hawking prohibitions with one general prohibition that applies to the hawking of all financial products, with limited exceptions.|
The amendments also introduce a definition of 'unsolicited contact'.
|The new regime commences on 5 October 2021.||Access the legislation here.|
|8.||Deferred sales model for add on insurance||Insurers||The Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (Cth) amends the Australian Securities and Investments Commission Act 2001 (Cth) to introduce a four-day pause between the sale of a principal product or service and the sale of an add-on insurance product.||The new regime commences on 5 October 2021.||Access the legislation here.|
Access ASIC's draft regulatory guidance here.
|9.||Extension of transitional compliance approach - non arm's length expenditure for super funds||Super funds||The ATO has amended Practical Compliance Guideline PCG 2020/5 to extend the compliance approach to the 2021-22 financial year. The ATO will not allocate compliance resources to determine whether the income of a complying super fund is non-arm's length income where the fund incurred non-arm’s length expenditure of a general nature that has a sufficient nexus to all ordinary and or statutory income derived by the fund for the 2018–19 to 2021–22 income years (for example, non-arm's length expenditure on accounting services).||The transitional compliance approach only applies to general expenditure incurred on or before 30 June 2022.||Read the updated practical compliance guide on the ATO's website here.|
|10.||Claims handling as a financial service||Insurers||The Financial Sector Reform (Hayne Royal Commission Response) Act 2020 (Cth) amends the Corporations Act to make claims handling a financial service requiring an AFS licence authorisation.||The 12 month transition period ends on 1 January 2022.||Read ASIC's media release on claims handling AFS licence applications here.|
Access the legislation here.
|11.||Reuniting More Superannuation Regulations made||Super funds|
Eligible rollover funds (ERFs)
|Regulations have been made to facilitate amendments made in the Treasury Laws Amendment (Reuniting More Superannuation) Act 2021 (Cth). The Act requires ERFs to close by 30 June 2021 (for accounts that had a balance of less than $6,000 on 1 June 2021) and by 31 January 2022 (for all other accounts). It also enables the Tax Commissioner to reunite amounts received from ERFs with a member's active account. The Treasury Laws Amendment (Reuniting More Superannuation) Regulations 2021 support these changes by:|
1. no longer requiring or permitting superannuation providers to transfer certain amounts to ERFs; and
2. enabling the Commissioner to pay interest on amounts the ATO receives from ERFs or other voluntary payments received from superannuation providers.
|All ERF accounts to close by 31 January 2022.|
(Low balance ERF accounts were required to close by 30 June 2021.)
|Access the legislation here.|
Access the regulations here.
Watch and Wait
The section sets out items where we’re waiting for further action to be announced or taken (eg consultation pieces, where the consultation period has ended).
|No.||What||Who||Need to Know||Important Dates||Links|
|1.||Your Future, Your Super - regulations||Super funds||The Government released three sets of exposure draft regulations in support of the Treasury Laws Amendment (Your Future, Your Super) Bill 2021 (Cth). The regulations provide:|
1. the methodology for the annual performance test and re-opening test, as well as requirements for notifications to members;
2. the definition of a 'stapled fund', including tie-breaker rules for determining which fund will be an employee's stapled fund where they have multiple existing funds;
3. how products will be ranked on the online YourSuper comparison tool;
4. the way in which super fund portfolio holdings are to be disclosed to members;
5. the information that must be included with the notice of an annual members' meeting; and
6. further strengthen the prohibition on funds offering inducements to employers.
|Consultation closed on 25 May 2021.||Access the draft regulations and explanatory material here.|
|2.||Transparency of proxy advice||Institutional shareholders, such as super funds, that engage proxy advisers||On 30 April 2021, the Government released a consultation paper seeking feedback on how to increase the transparency and accountability of the provision of proxy advice, including requiring proxy advisers to hold an Australian Financial Services Licence and meet requirements in relation to independence.||The extended consultation period closed on 4 June 2021.||Access the consultation paper here.|
|3.||APRA Connect update||Super funds||APRA published further information to assist entities in preparing for APRA Connect - APRA's new data collection solution for reporting entities.||APRA Connect test environment launched on 17 June 2021.|
Production environment goes live on 13 September 2021.
|Access information on APRA Connect here.|
|4.||Family law - Draft legislation on superannuation information for family law proceedings released for consultation||Super funds||The draft Treasury Laws Amendment (Measures for Consultation) Bill 2021: Superannuation information for family law proceedings was released for consultation, and seeks to amend the Taxation Administration Act 1953 (Cth) and the Family Law Act 1975 (Cth) to:|
1. enable parties to family law property proceedings in the Family Court of Australia, Federal Circuit Court of Australia and Family Court of Western Australia to apply to the court to request from the ATO information about the identity and value of their former partner’s superannuation assets; and
2. authorise the ATO to disclose this information to court registry staff.
The new information-sharing process is intended to make it harder for parties to hide or under-disclose their superannuation assets in family law proceedings.
|Consultation closed on 28 June 2021.||Access the draft legislation and explanatory materials here.|
|5.||2021-22 Federal Budget announcement - Industry working group to consult on legacy product rationalisation||Life insurers|
Responsible entities and trustees of MIS
|$2.5 million will be provided over 2 years to fund an industry working group to develop a mechanism to facilitate the movement of policyholders and members from closed life products and managed investment products to new products.||For 2 years from 2021-2022.||Access the 2021-22 Budget Paper No. 2 here.|
|6.||2021-22 Federal Budget announcement - More flexibility for the Pension Loans Scheme||Retirement income stream providers||The Pension Loans Scheme will be expanded to:|
1. allow participants to access up to 2 lump sum advances in any 12 month period, up to a total value of 50% of the maximum annual rate of the Age Pension; and
2. introduce a No Negative Equity Guarantee so borrowers will not have to repay more than the market value of their property.
|These improvements will be made over 4 years from 2021-22.||Access the 2021-22 Budget Paper No. 2 here.|
|7.||2021-22 Federal Budget announcement - Repeal of the work test for voluntary contributions for people aged 67 to 74||Super funds|
|People aged 67 to 74 (inclusive) will no longer need to meet the work test (ie. being gainfully employed for at least 40 hours over a 30 day period) to make or receive voluntary non-concessional contributions. They will still need to meet the work test to receive concessional contributions.||This measure is expected to take effect prior to 1 July 2022.||Access the 2021-22 Budget Paper No. 2 here.|
Read the ATO's webpage here.
|8.||2021-22 Federal Budget announcement|
- Lowering of eligibility age for downsizer contributions
|Super funds||The eligibility age to make downsizer contributions into super will be lowered from 65 to 60 years of age.||This measure is expected to take effect prior to 1 July 2022.||Access the 2021-22 Budget Paper No. 2 here.|
Read the ATO's webpage here.
|9.||2021-22 Federal Budget announcement - Removal of the $450 per month threshold for superannuation guarantee eligibility||Super funds|
|Removal of the $450 per month minimum income threshold for payment of the superannuation guarantee by employers. After this is implemented, employers will have superannuation guarantee obligations in respect of individuals earning less than $450 per month.||This measure is expected to take effect prior to 1 July 2022.||Access the 2021-22 Budget Paper No. 2 here.|
Read the ATO's webpage here.
|10.||2021-22 Federal Budget announcement - Increase to voluntary contributions that can be released under the First Home Super Saver Scheme||Super funds||The amount of voluntary contributions that can be released under the First Home Super Saver Scheme will increase from $30,000 to $50,000.||This measure is expected to take effect prior to 1 July 2022.||Access the 2021-22 Budget Paper No. 2 here.|
Read the ATO's webpage here.
This article was written by Adeline Hiew, Partner, Christine Blight, Special Counsel, Linda Chan, Solicitor and Joanna Roberts, Solicitor.