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Budget super measures become law

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A number of key measures from the last budget have passed through parliament, while others remain in limbo before the next election.

Legislation that will remove the work test and extend the non-concessional contribution bring-forward rules for superannuation fund members aged between 67 and 75 has passed through parliament.

The Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Bill 2021, which was introduced into the lower house in late October 2021, passed through both houses on 10 February and received royal assent on 22 February.

The bill carried a number of measures introduced as part of the 2021 budget and apart from the change to the work test and bring-forward rules, it will also result in the removal of the $450 income threshold for the super guarantee, a reduction in the downsizer contribution eligibility age from 65 to 60 and an increase in the amount eligible for release under the First Home Super Saver Scheme from $30,000 to $50,000.

All these measures will come into effect from 1 July 2022, while a further change to allow trustees of funds with no disregarded small fund assets to choose their preferred method of calculating exempt current pension income when they have member interests in both accumulation and retirement phases for part, but not all, of the income year, will commence from 1 July 2021.

Commenting on the passage of the bill via Twitter, the SMSF Association said: “It’s been a marathon week in #auspol with the Enhancing Super Outcomes Bill passing.

“Passage of this bill provides certainty for SMSF advisers and trustees as June rapidly approaches.”

SuperConcepts senior SMSF technical specialist Anthony Cullen noted that while some of the changes will not start until the 2023 financial year, they should be kept in mind as part of any planning strategies undertaken in the current financial year.

“Members will need to continue to comply with the current work test laws this financial year,” Cullen said.

“We also need to appreciate that the changes to the work test requirements will amend the Income Tax Assessment Act and shift the implications of not meeting the work test (where required) onto the individual contributor.”

Smarter SMSF chief executive Aaron Dunn said as this year’s federal election approached there was a sense of urgency around the finalisation of superannuation measures announced in the budget, but pointed out some measures had yet to be addressed.

“For SMSFs specifically we did not see the proposed residency and legacy pension conversions move from the initial budget announcement,” Dunn said.

“It appears likely that the coalition will remain committed to these measures within this year’s federal budget to be held on 29 March 2022, before things swing into election mode.

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