Author Archives: info@glss.com.au

1. Happy Financial New Year 2022!

   July 15, 2022 12:12 pm Comments Off on Happy Financial New Year 2022!

   Welcome to our latest newsletter, End of Financial Year Edition, in which we provide you with a brief checklist of items to consider.

   Contributions

   A brief reminder of some of the types of contributions you may have the opportunity to make by 30 June 2022:

   • Concessional contributions up to $27,500 pa;
   • Non-concessional contributions (so long as Total Super Balance at 30 June 21 is less than $1.7m) – the cap is $110,000 pa;
   • Access the bring forward rules – up to $330,000 if eligible;
   • Access unused concessional contributions (30 June 2021 Total Super Balance must be less than $500,000)
   • Spouse contributions (rebate maybe applicable);
   • Contributions using the one-off work test exemption (30 June 2021 Total Super Balance must be less than $300,000).

   Pensions

   It is important for members to reconcile all pension payments received from their SMSF retirement income streams since 1 July 2021 to ensure that there is no underpayment of the minimum pension payment required to be taken by 30 June 2022. If members do not withdraw the minimum pension required, then the SMSF will lose some or all of its tax exemption, and the relevant pension account will have to be rolled back to accumulation mode.

   If you are unsure what your minimum pension requirement is, please contact us so that we can assist you in this regard. We are working through every fund to check in on this as we speak.

   Valuations

   It is a requirement that all SMSF assets be valued at market value for reporting purposes. Whilst this is a simple process for listed securities, it can be quite complicated and time consuming to determine the market value of unlisted investments.

   We recommend that all SMSFs that have either direct property or indirect investment in property via unlisted structures commence the process of getting updated market valuations as soon as possible so that the 2022 year end work is not held up. To note this does not have to be formal valuations but must be based on comparable sales data.

   Some important changes from 1 July 2022

   Contributions

   • Individuals up to the age of 75 will no longer have to meet a work test to make voluntary, non-deductible contributions;
   • The bring forward rule will be extended to individuals up to the age of 75;
   • The minimum age to make downsizer contributions will reduce to 60.

   work test

   Currently, a member aged 67 to 74 can only make voluntary contributions to super if they have worked at least 40 hours over 30 consecutive days in the financial year. This work test must be met prior to them contributing.

   From 1 July 2022, this work test will only apply to a member who wants to claim a tax deduction on voluntary contributions made to super. This means that the work test will no longer apply to any of the following contributions:

   • Non-concessional contributions
   • Spouse contributions
   • Salary sacrifice contributions

   Further, where a member does make personal deductible contributions, they will be able to satisfy the work test at any time in the financial year.

   miscellaneous

   • The Superannuation Guarantee rate will increase to 10.5% pa;
   • The $450 minimum monthly threshold to be entitled to received Superannuation Guarantee will be removed;
   • Under the First Home Super Scheme eligible individuals will have access to an extra $20,000 of voluntary contributions to fund a home deposit (an increase from $30,000 to $50,000).

   

   As always, don’t hesitate to contact one of the friendly Greenlight Super Services team members if you require further assistance on (02) 6273 1066 or info@glss.com.au.

   This newsletter is for general information only. Every effort has been made to ensure that it is accurate, however it is not intended to be a complete description of the matters described. The newsletter has been prepared without taking in to account any personal objectives, financial situation or needs. The information contained is correct as of 6 June 2022

2. February 2022 update

   March 7, 2022 9:10 am Comments Off on February 2022 update

   Welcome to our first update for 2022, in which we outline the key super measures that have recently been passed by both Houses of Parliament. Once Royal Assent is given, most of these changes will apply from 1 July 2022

   Changes to the Work Test

   The work test requires individuals over the age of 67 to be gainfully employed for a minimum of 40 hours in a 30-day consecutive period. This definition has not changed – what has changed is when the work test needs to be applied.

   The rules for members aged 67 to 75 are essentially as follows:

   Current Rules	New rules from 1 July 2022
   Members wishing to make personal deductible contributions must satisfy the work test.	No change to this rule.
   Members must satisfy the work test in order to be able to make non-concessional contributions up to the annual cap of $110,000 or to make salary sacrifice contributions.	The work test no longer needs to be satisfied to make non-concessional contributions up to the annual cap of $110,000 or to make salary sacrifice contributions.

   Note: that there are no changes to the contribution rules for members over the age of 75 – they can still only receive mandated contributions (generally the Superannuation Guarantee amount of 10% or some other amount as dictated by an industrial award).

   At this point, it may be worth the reminder that from 1 July 2021 the concessional contributions cap increased from $25,000 to $27,500, and that the non-concessional contributions (‘NCCs’) cap increased from $100,000 to $110,000. Eligibility to make NCCs is still subject to being below the Total Superannuation Balance cap as at the 30 June prior (the cap was $1.6m up to 30 June 2021, $1.7m from 1 July 2021).

   Bring Forward Rules

   Removing the work test for NCCs has the flow on effect of extending the opportunity to use the bring-forward provisions. What this means is that members up to the age of 75 (previously 67) are now eligible to make use of this provision.

   There is no change to the fact that an individual’s capacity to make use of this rule is impacted by their Total Superannuation Balance – as per the following table:

   Total Superannuation Balance	NCCs and bring forward available (from 1 July 2021)
   Less than $1.48 million	3 years ($330,000)
   $1.48 – < $1.59 million	2 years ($220,000)
   $1.59 – < $1.7 million	1 year ($110,000)
   $1.7 million or more	Nil

   Downsizer contributions

   The eligibility age to make downsizer contributions will reduce from 65 to 60 years of age.

   The two most significant issues with reducing the age of eligibility are:

   • that anyone who contributes prior to the age of 65 will have to meet a condition of release to access the benefit; and
   • those who use it early will need to consider how the contribution impacts other contribution strategies (an individual’s capacity to make a downsizer contribution is not impacted by their Total Superannuation Balance, whereas the capacity to make non-concessional contributions is, so careful planning may be required).

   Other measures

   Exempt Current Pension Income (‘ECPI’)

   Trustees will be able to choose their preferred method of calculating ECPI (proportionate or segregation) when they have member interests in both accumulation and retirement phases for part, but not all, of the income year.

   Unlike all the other measures passed, this one comes into effect from 1 July 2021.

   First Home Super Saver Scheme (‘FSSS’)

   The maximum allowable withdrawal that can be made under the FHSSS will increase from $30,000 to $50,000 for anyone that requests a determination from 1 July 2022. More information about the scheme can be found here.

   Superannuation Guarantee Eligibility – Income Threshold Removed

   The $450 per month income threshold under the which employees do not have to be paid the superannuation guarantee by their employer will be removed. This is expected to improve equity in the system for casual and part-time workers.

   As always, don’t hesitate to contact one of the friendly Greenlight Super Services team members if you require further assistance on (02) 6273 1066.

   This newsletter is for general information only. Every effort has been made to ensure that it is accurate, however it is not intended to be a complete description of the matters described. The newsletter has been prepared without taking in to account any personal objectives, financial situation or needs. The information contained is correct as of 17 February 2022.

3. Director identification number

   January 25, 2022 11:40 am Comments Off on Director identification number

   Australian company and SMSF directors can now register for the new director ID.

   A director ID is a unique 15-digit identifier given to a director who has verified their identity with the Australian Business Registry Services and will help to prevent the use of false or fraudulent director identities. Directors will keep the same director ID for life. There is no charge.

   To apply, directors must log in to ABRS online using the myGovID app and the Director ID is issued instantly once the identification process has been completed. You will need a myGovID with a Standard or Strong identity strength to apply for your director ID online. It is possible to apply via the telephone or via paper, should you need to.

   When do you need to apply by?

   For all existing directors appointed prior to 31 October 2021:

   They will have a deadline of 30 November 2022 to apply for a DIN.

   For new directors:

   • Between 1 /November 2021 and 4 April 2022, new directors have 28 days to apply for a DIN after being appointed as a director.
   • From 5 April 2022, all directors will be required to apply for a DIN prior to being appointed as a director.

   Please note that directors must personally register for their DIN, meaning that we are unable to do this for you. We can, however, assist you by providing you with your Tax File Number if you cannot locate it, or by helping you understand the process.

   You can apply online or access further information through the Australian Business Registry Services website available here.

   As always, don’t hesitate to contact one of the friendly Greenlight Super Services team members if you require further assistance.

4. SuperStream rollovers and release authorities

   January 21, 2022 3:03 pm Comments Off on SuperStream rollovers and release authorities

   SuperStream is the electronic system used to transfer data to super funds and is used to process employer contributions and for rollovers between super funds. It can also be used for certain ATO release authorities. The idea behind SuperStream rollovers and release authorities is to make the processing faster, more efficient and with fewer errors.

   For the SMSF to be SuperStream ready, it needs:

   • An electronic Service address (ESA)
   • An Australian Business Number (ABN)
   • To ensure that its details are up to date with the tax office, including the SMSF’s bank account.

   The super fund paying the rollover also needs to ensure that the receiving super fund has complying or regulated status with the tax office, and that it has received the Tax File Number of the relevant member. Whilst the paying fund has three days to process a payment from when a rollover request is received, incomplete information will cause delays. Note that we are finding that many retail funds are requesting certified copies of bank statements.

   More information about this change can be found at the tax office’s Super Stream for Self-managed Super funds or their SMSF SuperStream FAQ.

   Please do not hesitate to contact us here at Greenlight if you have further questions in relation to the changes.