Non-Concessional Contribution Bring Forward extended until 67th birthday  

The Bill enables individuals aged 65 and 66 to trigger the bring-forward rule. Previously, members under age 65 at any time could bring forward up to two years’ worth of non-concessional cap for that income year, allowing them to contribute up to $300,000 to superannuation  The effective date of this legislation will date back to 1 July 2020, in line with the previously announced changes that increased the threshold for individuals to make contributions without requiring to meet the ‘work test’. 
 
The problem is that it is not law until it receives Royal Assent, best to speak to your adviser about the timing of this change before taking the plunge. 

Removal of Excess Contribution Charge (ECC) in some situation

If an individual exceeds their concessional contributions cap through no fault of their own (e.g. a doctor working for multiple hospitals exceeding the cap due to compulsory SG contributions) they will not be subject to the contributions charge on the excess. 

Recontribution of COVID-19 Withdrawals 

Recontributions of COVID release payments will be allowed and will not count against the Non-Concessional Contribution cap. This will allow a member that released amounts from superannuation under the COVID 19 early release rules to recontribute those amounts without counting towards the non-concessional cap. Importantly though, the amendment also confirmed they cannot be claimed as a tax deduction. 

Where applicable this will help those individuals who withdrew funds due to financial hardship to replenish their superannuation balance. 

SMSF membership limit 

The Bill increases from 4 to 6 the maximum number of allowable members in new and existing SMSFs and small APRA funds. These amendments ensure continued alignment with the increased maximum number of members for SMSFs. 

The Government said increasing the allowable size of these funds increases choice and flexibility for members. SMSFs are often used by families as a vehicle for controlling their own superannuation savings and investment strategies. 

For families with more than four members, currently, the only real options are to create two SMSFs (which would incur extra costs) or place their superannuation in a large fund. This change will help large families to include all their family members in their SMSF. 

 As mentioned above, although this Bill has passed through parliament but still requires Royal Assent so as always consult your Financial Adviser.