Minister for Revenue and the Assistant Treasurer
27 January 2006 - 3 December 2007
Wednesday 7 February, 2007
Simplified Superannuation — consequential amendments introduced to Parliament and transitional arrangements
The Minister for Revenue and Assistant Treasurer, Peter Dutton, today introduced the Superannuation Legislation Amendment (Simplification) Bill 2007 and related Bills to Parliament.
These Bills, together with the Bills introduced in early December 2006, implement the Government’s Simplified Superannuation reforms.
The Bills introduced today make consequential amendments required to implement the reforms, such as the repeal of the old superannuation law, as well as updating references to superannuation law contained in various Acts.
The Bills also implement a previously announced measure to improve the arrangements in respect of unclaimed superannuation.
“The Australian Government will now take responsibility for the management of unclaimed superannuation, which will provide a single access point for individuals searching for lost or unclaimed superannuation and a simpler national claims process going forward,” the Minister said.
Minor additions to the Simplified Superannuation law are also made to clarify arrangements or to address industry and community concerns. These amendments include clarification of transitional arrangements for employers and individuals with substituted accounting periods and relaxed arrangements for people contributing amounts related to personal injury or small business capital gains tax concessions up to 30 June 2007.
“Under these revolutionary reforms, Australians aged 60 or over will be able to access their superannuation benefits tax free from 1 July 2007 if they are paid from a taxed superannuation fund. The Government’s plan will re-engage ordinary Australians with their superannuation savings and increase incentives to work and save, just as Australia is facing its greatest demographic challenge: the ageing of our population.
“I call on Labor to support these bills and pass them through the Parliament as soon as possible to allow Australians to plan for the future with confidence,” the Minister said.
The remaining aspects of Simplified Superannuation will be implemented through regulations which will be made as soon as possible after the Bills receive Royal Assent.
Mr Dutton also announced today additional transitional arrangements for contributions to superannuation by people who were age 64 or 74 during the three month consultation period on Simplified Superannuation. Further details are attached.
Media Contact: Brad Emery
(02) 6277 7360 – 0414 225 638
Once a person turns age 65 they must satisfy a work test before they can make contributions to a superannuation fund. Once they turn 75 they are generally unable to make any superannuation contributions.
The Simplified Superannuation reforms were announced on 9 May 2006 as part of the 2006-07 Budget and the Government then undertook an extensive three month consultation process on the proposals. In response to concerns raised during the consultation period on the Simplified Superannuation reforms, on 5 September 2006 the Government announced an increase in the amount of non-concessional contributions a person can make to $1 million for the period between 10 May 2006 and 30 June 2007.
Transitional measures are being introduced to ensure people who may have become subject to the work test applying to superannuation contributions, or become ineligible to contribute to superannuation, between 10 May 2006 and the Government’s announcement on 5 September 2006, can still take advantage of the higher contribution limits.
A person who was aged 64 between 10 May and 5 September 2006 will be able to make non-concessional superannuation contributions up to 30 June 2007 without having to satisfy the work test. A person aged 74 between those dates will be able to make superannuation contributions up to 30 June if they had satisfied the work test for the relevant financial year. Amendments to the relevant regulations to implement these transitional arrangements will be made as soon as possible.
Individuals who were aged at least 65 but less than 74 between 10 May and 5 September 2006 will continue to have to satisfy the work test to contribute to superannuation.
Media Contact: Brad Emery
02 6277 7360 – 0414 225 638