SMSF Changes in the 2023 Federal Budget
On the 10th of May 2023, the Australian Federal Government announced the annual budget for the upcoming financial year. There were several changes proposed that will have an impact on self managed superannuation funds (SMSFs) and superannuation in general. Here are the key details of the changes:
1. Superannuation Guarantee (SG) increase: The SG rate, which is the minimum percentage of an employee's salary that employers are required to contribute to their superannuation, will increase from 10% to 12% by 1 July 2026. This will be a gradual increase of 0.5% each year.
2. Removal of the $450 per month minimum earnings threshold: Currently, employers are not required to make SG contributions for employees who earn less than $450 per month. This threshold will be removed, meaning that all employees, regardless of their income, will receive SG contributions.
3. SMSF audit requirements: The government will increase the annual audit threshold for SMSFs with a history of good record-keeping from $2 million to $5 million. This means that SMSFs with assets below $5 million will only require an audit once every three years.
4. Superannuation contributions for older Australians: From 1 July 2023, Australians aged 75 and over will be able to make voluntary superannuation contributions, without needing to meet the work test. This will provide greater flexibility and options for older Australians to boost their retirement savings.
5. Superannuation Guarantee amnesty: A one-off superannuation guarantee amnesty will be offered to employers who have not met their SG obligations in the past. Employers who come forward during the amnesty period will be able to claim a tax deduction for catch-up payments, and will avoid penalties and charges that would otherwise apply.
These changes are aimed at improving the retirement outcomes for Australians, and provide greater flexibility and options for SMSF trustees. It is important for SMSF trustees to consult with a financial advisor or tax specialist to understand how these changes will affect their specific circumstances. By doing so, SMSF trustees can make informed decisions about their retirement planning and ensure they are taking advantage of any opportunities that may arise.
Contact us today for more information about how this could affect your SMSF. 0755041999