October Budget 2022 – super aspects summary

Increase in Com Penalty Unit

• Increase to $275 (presently $222)
• Operative date 1 January 2023
• Example – breach of operating standard (such as failing to keep separate assets held by entity in its capacity as SMSF trustee from its personal capacity) – from 1 January 2023 the maximum penalty will be $5,500 as against current maximum penalty of $4,440

Previous Government’s unlegislated tax/super measures – to be dumped

• The proposal ((2016/17 Budget) to introduce Limited Partnership Collective Investment Vehicles – has been dumped
• Proposal (2018/19 Budget) to permit SMSFs to adopt 3 yearly audits – dumped
• Proposal (2018/19 Budget) to introduce a requirement for retirement income product providers to report standardised metrics in product disclosure statements – dumped

Previous Government’s unlegislated tax/super measures – to be implemented (mostly deferred start dates)

• Relaxing of residency requirements for SMSFs – from 1 July 2022 to the start of the income year commencing on or after date of Royal Assent of the relevant enabling legislation

No mention of legacy income streams

• No mention of the May 2021 Budget proposal to allow legacy income streams to be converted to account-based income streams (subject to Transfer Balance Account space) or cashed out
• Consequently, it is unknown whether this proposal has been dumped or will be implemented

Downsizer Contributions – reducing minimum eligibility age of (beneficiaries) of Downsizer Contributions

• To be reduced from age 60 to age 55
• Not change to the $300,000 cap
• This change had been previously announced
• Consequently, it is unknown whether this proposal has been dumped or will be implemented

Incentivising Pensioners to Downsize

• Extending the asset test exemption for principal home sale proceeds from 12 months to 24 months for income support recipient (e.g. Age pension)
• Changing the income test (to apply the lower deeming rate – currently 0.25%) to principal home sale proceeds when calculating the deemed income for 24 months after the sale of the principal home
• Applies from 1 July 2022
• Measures previously announced and enacted (Act No 43 of 2022)

Lifting the Income Threshold for the Commonwealth Seniors Health Card

• Increase cut-off point to $90,000 (currently $61,284) – singles
• Increase cut-off point to $144,000 (currently $98,054) – couples
• Applies from 4 November 20022
• Measure previously announced and now enacted (Act No 43 of 2022)