The Australian Government has announced several measures related to superannuation that impact life insurers and corporate partners. Here are the key highlights:
- Targeted Superannuation Concessions: At present, earnings from superannuation during the accumulation phase are subject to a concessional tax rate of up to 15 per cent. This arrangement will continue for all superannuation accounts with balances below $3 million. Starting from 2025-26, any future earnings for balances exceeding $3 million will be subject to a higher concessional tax rate of 30 per cent.
- Payment Frequency of Super Guarantee (SG) Contributions: Starting 1 July 2026, employers will be required to align the payment frequency of SG contributions with salaries and wages. This change aims to provide greater visibility for employees to track their entitlements and enable early intervention against underpayment.
- Improving Superannuation Compliance: The government will invest in improving data capabilities to identify instances of SG contribution underpayment. Enhanced recovery measures will be implemented, and the Australian Taxation Office (ATO) will be assessed on its performance in recovering unpaid superannuation, reporting annually against the new measures that have been set.
- Non-Arm's Length Income (NALI): Amendments will be made to the NALI provisions for self-managed superannuation funds and small APRA-regulated funds, limiting taxable income and exempting certain expenses.
- Superannuation Consumer Advocate: Funding of $5.0 million over 5 years will be provided to continue a superannuation consumer advocate, aimed at improving member outcomes.
These measures aim to ensure the fairness, sustainability, and integrity of the superannuation system. They offer opportunities for life insurers and corporate partners to support their customers in adapting to the changing landscape and achieving their retirement goals.
Posted: 29-05-2023
