On 18 June 2021, several bills containing important superannuation measures which will impact employers and their employees passed both Houses of Parliament and have become law.
Super fund stapling
As part of the ‘Your Future, Your Super’ reforms, which aims to make the superannuation system deliver better outcomes for members, the Government has announced a change to employer default contributions by introducing ‘stapled’ super accounts. Importantly, this change has been pushed back to an effective date of 1 November 2021 (rather than the original proposed date of 1 July 2021).
This change means that when an employer onboards a new employee and they do not nominate a super account, they will need to contact the Australian Taxation Office (ATO) and confirm if the employee has a stapled super account. If the ATO has a record of a stapled super account for the employee, they will provide the relevant contribution details to the employer. The employer will need to treat this account as their ‘default’ account for the purpose of making Super Guarantee contributions.
If the employee has multiple super funds, the ATO will generally determine that the appropriate default, or stapled fund, is the fund that has received the most recent SG contributions.
The ATO does not have an immediate online functionality for employers to get details about stapled super funds, but they have confirmed their commitment to supplying this information through manual channels from 1 July 2021. Over time, the ATO intends to incorporate this into the Single Touch Payroll onboarding process.
Non-concessional cap bring-forward rule extended to people age 67
The three-year non-concessional cap (NCC) bring forward rule has been extended to people under age 67 (previously under age 65). It started on 1 July 2021 but has been implemented retrospectively to 1 July 2020.
This will allow older employees to add additional funds to their super to help them save for retirement.
People who made an early access to super withdrawal under the former COVID-19 condition of release, may re-contribute these amounts back into their super without it counting towards their non-concessional contribution cap.
Re-contributed amounts must be made between 1 July 2021 and 30 June 2030. The total amount of contributions must not exceed the early access to super COVID-19 condition of release amount. However, these re-contributions will not be eligible for a personal tax deduction.
Reminder: Increase to the Super Guarantee rate and Concessional contribution cap
From 1 July 2021, the Super Guarantee (SG) rate increased from 9.5% to 10% and the Concessional contribution cap increased from $25,000 to $27,500 pa.
Published : 13 Jul 2021