News 07/08

Super Concepts e-SuperUpdate provides you with technical tips and updates on Self Managed Superannuation Fund topics of interest.

Considering some of the rumours that were circulating over the past months about superannuation, this year's Federal Budget provided very few changes to the super system and no changes to self managed super funds.

This means:

• No changes to the tax free lump sums and pensions for those 60 and over
• No changes to transition to retirement pensions, and
• No changes to the current strategy of borrowing via super - instalment warrants - even though many had predicted that there would be significant changes.

The superannuation changes announced were:

• Confirmation that access to tax free lump sums for those with a terminal medical condition would be back-dated to commence from 1 July 2007 rather then from 12 September 2007 as originally announced.
• Deferral of the start date nearer to the end of 2008 for payment to the government of temporary residents' superannuation in certain circumstances.
• Establishing an optional clearing house from 1 July 2009 to allow employers to pay superannuation contributions to a single location for distribution to the employee's fund of choice. The clearing house would be available at no charge for employers who have less than 20 employees.

In addition to these proposed changes the government has decided to change the definition of income for purposes of determining whether a person is eligible for certain government support payments and the co-contribution. From 1 July 2009 'income' will include amounts that have been salary sacrificed to superannuation.

As you can see, the announcements in this year's Federal Budget made little change to the superannuation landscape. However, what it has given us is greater confidence in planning for our retirement in a tax effective way. This means we can use the Better Super changes which commenced on 1 July last year to the best possible advantage.