What Simplified Superannuation is bringing

Australia’s superannuation system’s objective is to assist and encourage people to achieve a higher standard of living in retirement than would be possible from the age pension alone.

With an ageing population, the effective operation of retirement income strategies is critically important to Australia’s future.

In regulating and administering the self managed superannuation funds, the Tax Office is contributing to a retirement income policy that has enduring social impacts.

Encouraging taxpayers to direct their savings into superannuation together with the Super Guarantee from employers has seen total superannuation assets rise from $519 billion in 2001 to over $945 billion by September 2006 ².

Not only are Australian superannuation assets approaching a trillion dollars in value but the aspirations and security of many Australians are similarly committed.

It behoves the Tax Office to be innovative in designing new business processes and investing in new technologies to support the new measures and to do so in a way that adds public value.

Over $600 million paid in latest super co-contribution payments

The Assistant Treasurer has announced that 799,156 Superannuation Co-contribution payments worth more than $631 million were made to Australian workers during the period 1 October 2006 to 31 December 2006 (all refer to after-tax superannuation contributions made during the 2005-06 Financial Year).

Simplified super: APRA reminds trustees of prudential implications

APRA has reminded superannuation trustees of the additional risk management implications flowing from the expected surge of money into the superannuation system as a result of the 'simpler super' reforms. In a recent speech the APRA General Manager of Specialised Institutions Division said trustees will need to address the implications of additional investment risks, operational risk, management, governance and self-regulation issues.

Simplified super: additional draft regs and standard portability form released

The Assistant Treasurer has announced the release of further draft regulations and a standard portability form to support the simplified superannuation reforms. The standard portability form and instructions are for use by members to request a transfer of the whole balance of superannuation benefits between funds. The draft regulations also make amendments to support the concessional and non-concessional contributions caps, and provide guidance to funds on the handling of member contributions made without a TFN.

Proposed removal of dividend tainting rules: ATO administrative treatment

In November 2006, the Government announced that it would remove both the dividend tainting rules and the rules that deny franking credits when additional tax is paid because of a transfer pricing adjustment. Legislation has not yet been introduced to implement this announcement and the Tax Office has now released details of its proposed administrative treatment of the law pending enactment of the necessary legislation.

Procedures for lodging family trust and interposed entity elections

Family entities have a one-off opportunity to lodge, by 31 May 2007, a family trust election (FTE) and/or an interposed entity election (IEE) that should have been lodged in a year before the 2004 income year. FTEs and IEEs for 2004 and earlier income years may be lodged up to that date, even if the entity's 2004 income tax return has already been lodged. The extension also applies to entities that were not required to lodge a 2004 tax return. The Tax Office has now re-released the procedures for lodging those FTEs and IEEs.