Fair and Sustainable Super Act - now (almost) law

The legislation to enact the Government’s Super Changes has now been passed by both Houses and now awaits Royal Assent.  The principal act is “Treasury Laws Amendment (Fair and Sustainable Superannuation) Act, 2016”- and was introduced into Parliament on 9 November 2016.  This Act is about 140 pages long and the Explanatory Memorandum (and the much small “Objectives” and “Excess Balance Tax” associated Acts) is over 360 pages long.

No changes were made to the Bill during its passage through the Senate.

However, one important and favourable change was made to the Bill before it was introduced into Parliament.  This change relates to reversionary pensions.  The Bill provided that on a transfer of a pension to a reversionary beneficiary, the transferred pension will be counted against the $1.6m pension transfer cap of the reversionary beneficiary – after a grace period of 12 months from the date of transfer of pension.  In the Exposure Draft of the Bill, the grace period was only 6 months.  This change means that reversionary beneficiaries will have 12 months in which to decide if and how much of the pension must be commuted to avoid having an excessive pension and thereby incur excess balance transfer tax.

It seems that sometimes the Government and its advisers do consider submissions made on the draft legislation and sometimes act upon those submissions.