Issue 798, 13 April 2021
In this issue:
- Insurance in Superannuation Voluntary Code of Practice: survey of signatories
- Reuniting more superannuation reforms: regulations
- Superannuation caps and thresholds indexed
- Coronavirus early release of superannuation: ATO program report
Insurance in Superannuation Voluntary Code of Practice: survey of signatories
The Code owners of the Insurance in Superannuation Voluntary Code of Practice (Code), AIST, ASFA and FSC, note that many funds are well progressed in implementing the Code. However, the Code owners are seeking the views of their members on the impact that recent legislative changes (including the implementation of the Protecting Your Super/Putting Members’ Interests First reforms) have had on the viability of the Code. While we have agreed to defer the start date to 1 January 2022, the Code owners believe it is important to now make a decision on the future of the Code. The Code owners are jointly seeking your feedback. Specifically, could you please advise;
Do you agree that the Code should be registered with ASIC and for certain provisions to be made enforceable (with civil penalties), and subject to broader overview and enforcement through an industry funded code compliance committee? Y/N?
If No:
- Do you agree the measures to support vulnerable consumers should be non-enforceable guidance from your association, rather than part of an enforceable code? Y/N
- Do you agree that the claims handling provisions of the Code should be non-enforceable guidance from your association, rather than part of an enforceable code? Y/N
Please forward any feedback you may have to Byron Addison, Senior Policy Adviser, by close of business Wednesday, 21 April. If you have any questions, please email or contact Byron on 02 8079 0834.
Reuniting more superannuation reforms: regulations
The Government has made regulations supporting reforms recently enacted via the Treasury Laws Amendment (Reuniting More Superannuation) Act 2021
(see ASFA Action issue 795 for background).
The Act:
- facilitates the closure of eligible rollover funds (ERFs) by 31 January 2022
- allows superannuation providers to voluntarily transfer an amount of superannuation benefits to the Commissioner of Taxation in certain circumstances where the trustee believes it to be in the best interests of the member
- provides for the reunification of these amounts with a member’s active account or to the person directly, where that person has reached the eligibility age, or the amount is less than $200.
The Government has now made the Treasury Laws Amendment (Reuniting More Superannuation) Regulations 2021 to support those reforms. The regulations amend the Superannuation (Unclaimed Money and Lost Members) Regulations 2019, the Superannuation Industry (Supervision) Regulations 1994 and the Retirement Savings Accounts Regulations 1997 to:
- no longer require or permit superannuation providers to transfer certain amounts to ERFs
- enable the Commissioner to pay interest on amounts the Commissioner receives from ERFs or other voluntary payments received from superannuation providers.
Superannuation caps and thresholds indexed
The ATO has published the superannuation caps and thresholds for 2021-22, several of which have been indexed for the first time since 2017.
Some of the key caps and thresholds for 2021-22 are as follows:
- the concessional contributions cap increases to $27,500 per year (up from $25,000) and the non-concessional contributions cap increases to $110,000 per year (up from $100,000). It must be noted that these caps are subject to several conditions, variations and exemptions therefore these amounts will not apply for all individuals
- the low rate cap amount (the limit on the amount of taxable components of superannuation lump sums that receive concessional tax treatment) increases to $225,000 (up from $215,000)
- the Superannuation Guarantee maximum contribution base (used to determine the limit on any individual employee’s earnings base for a quarter) increases to $58,920 (up from $57,090)
- the upper and lower income thresholds for the Government co-contribution increase to $56,112 and $41,112 (up from $54,837 and $39,837)
- the general transfer balance cap (the limit on the total amount of superannuation that can be transferred into the retirement phase) increases to $1.7 million (up from $1.6 million), as advised in ASFA Action issue 792.
Coronavirus early release of superannuation: ATO program report
The ATO has published a report providing final statistics on the Coronavirus early release of superannuation initiative.
The COVID-19 Early release of super report (20 April – 31 December 2020) provides statistics about applications from the commencement of the initiative on 20 April 2020 through to its closure on 31 December 2020. It includes:
- applications by financial year
- requests by fund type
- applicants by gender, age, state and territory, income range and request category
- monthly approvals and accumulated value.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.
