Budget 2018: What's in it for Superannuation ?

In the last Budget before the next Federal election, the Treasurer delivered an election Budget with enough sweeteners for everyone including businesses, income tax relief for individuals, measures to boost superannuation, and help for older Australians.

So what’s in it for superannuation and super funds?

In the Budget, the Government announced measures to ensure that Australians keep more of their super, including:

    giving the ATO capacity to actively reunite Australians with their lost and inactive superannuation;

    capping certain superannuation fees at 3% for accounts with balances of less than $6,000;

    Ÿbanning superannuation exit fees to make it easier for Australians to consolidate their superannuation; and

Ÿ    tailoring insurance arrangements to ensure that they are opt-in rather than opt-out.

Older Australians

The Government has tried to please both pensioners and self-funded retirees with the following measures announced in the Budget:

expansion of the pension loans scheme to those on the full pension and self-funded retirees to give them the option to boost their retirement income. Full pensioners will be able to increase their income by up to 50% of the Age Pension.

expansion of the pension work bonus which will allow age pensioners to earn up to $300 per fortnight (up from $250) without reducing their pension payments. The bonus will also be extended to self-employed individuals who will be able to earn up to $7,800 per year.

exemption from the superannuation work test for those aged 65-74 with superannuation balances below $300,000.

standards of living in retirement will be boosted and retirees will have greater choice in how they receive their superannuation through the Government’s retirement income framework.

SMSF member limit to increase from four to six

The Budget confirmed that the maximum number of allowable members in new and existing self-managed superannuation funds (SMSFs) will be expanded from four to six members from 1 July 2019.

This change may assist those with larger families to implement intergenerational solutions for managing long-term, capital intensive investments, such as commercial property and business real property. For example, allowing an extra two members provides an opportunity to improve a fund’s cash flow by using the contributions of the younger members to make pension payments to the members in retirement phase, without needing to sell a long-term investment.

As each member must be a trustee of the fund, a decision to add extra members should not be taken lightly as it can add complexity to the fund’s management and investment strategy

Superannuation work test exemption for contributions by recent retirees

The Government will introduce an exemption from the work test for voluntary superannuation contributions by individuals aged 65–74 years with superannuation balances below $300,000 in the first year that they do not meet the work test requirements.

Want to find out more?

Do you want to find out more about how this Budget affects your superannuation and your future?

We will help you find the answers and plan for your future.

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