October Budget 2022 – dot point summary of super aspects

Increase in Com Penalty Unit

• Increase to $275 (presently $222)
• Operative date 1 January 2023
• Example – breach of operating standard (such as failing to keep separate assets held by entity in its capacity as SMSF trustee from its personal capacity) – from 1 January 2023 the maximum penalty will be $5,500 as against current maximum penalty of $4,440

Previous Government’s unlegislated tax/super measures – to be dumped

• The proposal ((2016/17 Budget) to introduce Limited Partnership Collective Investment Vehicles – has been dumped
• Proposal (2018/19 Budget) to permit SMSFs to adopt 3 yearly audits – dumped
• Proposal (2018/19 Budget) to introduce a requirement for retirement income product providers to report standardised metrics in product disclosure statements – dumped

Previous Government’s unlegislated tax/super measures – to be implemented (mostly deferred start dates)

• Relaxing of residency requirements for SMSFs – from 1 July 2022 to the start of the income year commencing on or after date of Royal Assent of the relevant enabling legislation

No mention of the May 2021 Budget proposal to allow legacy income streams to be converted to account-based income streams (subject to Transfer Balance Account space) or cashed out.  Consequently, it is unknown whether this proposal has been dumped or will be implemented

 Downsizer Contributions – reducing minimum eligibility age of (beneficiaries) of Downsizer Contributions

• To be reduced from age 60 to age 55
• Not change to the $300,000 cap
• This change had been previously announced

Incentivising Pensioners to Downsize

• Extending the asset test exemption for principal home sale proceeds from 12 months to 24 months for income support recipient (eg Age pension)
• Changing the income test (to apply the lower deeming rate – currently 0.25%) to principal home sale proceeds when calculating the deemed income for 24 months after the sale of the principal home
• Applies from 1 July 2022
• Measures previously announced and enacted (Act No 43 of 2022)

Lifting the Income Threshold for the Commonwealth Seniors Health Card

• Increase cut-off point to $90,000 (currently $61,284) - singles
• Increase cut-off point to $144,000 (currently $98,054) – couples
• Applies from 4 November 20022
• Measure previously announced and now enacted (Act No 43 of 2022)

For any further information regarding this article please call SUPERCentral on 02 8296 6266 or email us at info@supercentral.com.au.