SuperUpdate March 2007
SuperUpdate March 2007 |
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The legislation to give affect to simplified super received Royal Assent on 15 March 2007. The majority of new measures outlined in the legislation will take effect from 1 July 2007. Some transitional measures apply from as early as 10 May 2006.
We have several products on our website which provide information about the changes, including:
We are also preparing a major public awareness and education campaign to make sure the Australian community is aware of the simplification of superannuation and to encourage people to take more interest in their retirement income.
Look out for more information in future editions of Super Update and on our website.
From 10 May 2006 until 30 June 2007 super fund members can contribute up to $1 million of non-concessional contributions to their super fund. Any non-concessional contributions over this amount will be taxed at 46.5%.
If super fund members made non-concessional contributions between 10 May 2006 and 6 December 2006 which exceeded the $1 million transitional cap they can apply to the Commissioner for authorisation to release some, or all, of the excess contributions.
Note that contributions arising from certain personal injury payments or certain capital gains tax concessions for small business may be excluded from the transitional non-concessional contribution cap.
Fund members can visit our website for a Request for transitional release authority form (this will be available shortly).
The member must send us the following information by 30 June 2007:
The supporting documentation provided must verify the:
The supporting documentation may include a contribution acknowledgment letter, super fund statement or letter, or a letter from the member’s employer. Funds should expect some requests for documentation from their members. In the meantime, the Tax Office would hope that funds will advise any members who have exceeded the transitional cap to lodge a request for a transitional release authority.
We will consider the request and respond within 28 days of receiving all the required documentation. If the request is granted we will issue a transitional release authority.
The member then needs to complete and send the authority to the complying fund or funds within 21 days of the issue date. If they are sending the authority to more than one fund, they can photocopy the form, but they need to send a completed form with an original signature to each fund releasing the money. The front page of the form can be completed once and then photocopied as this information will not change from fund to fund.
The super fund must release the lesser of the following amounts directly to the member:
The super fund must do this within 30 days of receiving the transitional release authority.
The super fund then provides a statement to the member and the Tax Office stating the excess contributions have been released. Funds should use Section D of the transitional release authority to report to the Tax Office.
The statement must be issued within 30 days of releasing the excess contribution amount.
We will use information provided on the member contributions statement (MCS) lodged by super funds and other data (including the statement from the fund confirming that a release authority has been actioned) to determine whether an excess non-concessional contributions tax assessment should be raised.
Self managed super funds (SMSFs) can lodge their 2006-07 MCS with their income tax return. Some SMSFs have a lodgment due date as late as 15 May 2008.
Other super funds have until 31 October 2007 to lodge the 2006-07 MCS.
To minimise the impact of simpler super on funds, we have not changed Member Contribution Statement requirements for the years ended 30 June 2006 or 30 June 2007. However, this may mean we will need to request additional information from super funds to facilitate the identification and calculation of excess non-concessional contributions as at 30 June 2007. This is unlikely to occur before November 2007.
The following products are currently available on our website:
The following products will be available on our website shortly:
From 1 July 2007, linking super fund accounts with the member’s correct tax file number (TFN) will be even more important.
Where members have not quoted their correct TFN to their super fund their:
After matching 2005–06 membership contributions statements with our data, we have identified over three million fund members whose TFN has not been provided to their super fund.
In late April to early May, we will begin writing to these members to advise that we will provide their TFN details to their super fund on their behalf. Members will have 28 days from the date of our letter to contact us if they don’t want this information passed on.
If members are happy for their TFN details to be sent to their super fund/s, they do not need to contact us.
TFN information will be sent to super funds using the existing surcharge assessment process (SPAD file) towards the end of June 2007. However, there will be no surcharge assessment data sent with the transaction.
To assess the response to the letters and associated impacts, we will also be running a pilot of up to 4,000 letters the week beginning 19 March 2007. It is not expected that the pilot will generate many calls to funds.
We will be contacting all funds directly with further information.
Further updates will be provided in the April SuperUpdate.
As part of simpler super, unclaimed money from private sector super funds will have to be paid to the Australian Government (except for state and territory government superannuation schemes).
From 1 July 2007, unclaimed super from private sector schemes is required to be paid to us, rather than to their state or territory authority.
The reporting requirements for each half-year period are as follows:
Information on how the new legislation will affect unclaimed money and how to report it will be progressively added to our website.
Self managed superannuation funds (SMSFs) are required to lodge their member contributions statements (MCS) by 31 March 2007.
If the SMSF’s income tax and regulatory return is due after 31 March, they may extend the lodgment date of their MCS to the due date of their return.
31 March is a Saturday this year so SMSFs have until the close of business on the next working day to lodge their MCS.
For more information about MCS and how to complete the lodgment form, refer to How to complete the Superannuation member contributions statement.
The Tax Office has developed a new manual to help you correctly report benefits for RBL purposes.
If you receive an outcome of lodgment error report, this means that some or all of your RBL report has been rejected and requires amendment.
The information in the error manual will help you:
Information must be reported for RBL purposes by the 14th day of the month after the month the benefit was paid.
How to access the RBL outcome of lodgment report – error manual
The RBL error manual is available on our website or by phoning 13 10 20.
Last Modified: Friday, 23 March 2007