Outside of tax and compliance, the 2013 Federal Election also saw changes in superannuation that would impact SME owners in a significant way. Most notably, the introduction of SuperStream, which is explored in more detail below.
Major Points
- Keeping the current 9.25% rate for Superannuation Guarantee until 1 July 2016 when it will increase to 9.5%
- A proposed tax on pension earnings of more than $100,000 a year per person, was tabled but never legislated by the ALP, so now may be shelved, although the Coalition has not formally announced its position.
- The Coalition has stated the intention to scrap the low income superannuation contribution (LISC) scheme, a Labor initiative which contributes $500 a year in superannuation to those who earn less than $37,000 a year.
- With regard to Future of Financial Advice (FoFA) reforms the Coalition has confirmed it will do the following and have already drafted the necessary documentation to implement the changes:
o Completely remove the opt-in requirements
o Simplify and streamline the annual fee disclosure requirements
o Provide certainty around the provision and availability of scaled advice
o Refine the ban of commissions on risk insurance inside superannuation
The Government will deliver its election promise and transfer the Small Business Superannuation Clearing House to the Australian Taxation Office (ATO) from April 2014 in an act to reduce red tape surrounding superannuation for small businesses. This will allow for small businesses to easily meet their superannuation obligations through their regular interaction with the ATO. The Government will further investigate on possible options to ease the superannuation compliance on small businesses through an extensive consultation process.
SuperStream - On 1 July 2011, the Government commenced the implementation of the ATO administered SuperStream, a package of measures designed to enhance the 'back office' of superannuation using:
- Internet based technology
- Uniform electronic data transfer standards and payments system
- ATO tax file numbers as a key identifier
- Straight through processing of superannuation transactions including contributions
The 1st July 2014 is the first key date of implementation of SuperStream and all employers need to be across their responsibilities. We will be covering this in more depth in the coming months, however, you can refer to our previous blog post for more information at this stage.
If you have any immediate concerns about how your business is likely to be affected please do not hesitate to call Azure Group on (02) 9238 1188 or email ourteam@azuregroup.com.au and we will direct you to the most appropriate advisor.
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