The Lander & Rogers Superannuation Alert is a brief overview of new developments in the superannuation industry.
First Home Super Saver Scheme and Downsizer Contribution Scheme
On 7 September 2017, the First Home Super Saver Tax Bill 2017 and Treasury Laws Amendment (Reducing Pressure on Housing Affordability Measures No 1) Bill 2017 (Bills) were introduced into the House of Representatives. The Bills propose to implement the First Home Super Saver (FHSS) Scheme and a Downsizer Contribution Scheme (DCS).
According to the Explanatory Memoranda, under the FHSS Scheme "first home savers who make voluntary contributions into the superannuation system can withdraw those contributions (up to certain limits) and an amount of associated earnings for the purposes of purchasing their first home…[and]…[c]oncessional tax treatment applies to amounts that are withdrawn." The date of effect is 1 July 2017 for contributions, and 1 July 2018 for withdrawals.
With respect to the DCS, the Explanatory Memoranda states that the scheme will allow "an individual to use the proceeds in relation to one sale of their main residence to make contributions of up to $300,000 to their superannuation provider if they are 65 years or over" (this is referred to as a "downsizer contribution"). The Explanatory Memorandum goes on to explain that "Downsizer contributions can be made regardless of the other contribution caps and restrictions that might apply to making voluntary contributions." The amendments apply to the proceeds from contracts entered into on or after 1 July 2018.
|ASIC consultation paper||ASIC's power to ban senior officials in the financial sector|| |
On 6 September 2017 a Taskforce set up to review the enforcement regime of ASIC released its Consultation Paper, which discusses ASIC's power to ban individuals from providing financial services in certain circumstances.
According to the Consultation Paper "the Taskforce positions on reform seek to enhance ASIC’s banning power by ensuring that it may take appropriate action to ban senior managers from managing financial services businesses. The need to enhance ASIC’s banning power in the financial services and credit sectors was flagged in the final report of the Financial System Inquiry (FSI). The FSI considered that enhanced banning powers would improve accountability of managers and corporate culture."
The Consultation Paper outlines two positions on ASIC's banning power and invites responses from interested parties up until 4 October 2017.
|ATO||Large super fund compliance with reporting obligations||James O'Halloran, Deputy Commissioner, Superannuation Speech to The National Superannuation Conference|| |
On 24 and 25 August, the Deputy Commissioner, Superannuation, James O'Halloran, spoke at the Tax Institute National Superannuation Conference concerning, amongst other things, large super funds' performance in meeting their reporting obligations.
According to Mr O'Halloran, "the most recent feedback on the reports from fund executives has been overwhelmingly positive and 99 per cent of funds met their reporting obligations to a good or high standard in 2016".
Mr O'Halloran stated that "despite the stellar compliance figures, [the ATO] will remain vigilant", due to the high impact any incidence of non-compliance would have on the tax and super system, given the "large amount of assets held, income generated and tax paid." According to Mr O'Halloran, large funds currently hold around 62 per cent of the total superannuation assets.
|Case Law||Interpretation of trust deed definition of "salary" for hospital employees||FSS Trustee Corporation v Eastaugh  VSCA 218|| |
On 29 August 2017, the Victorian Court of Appeal handed down its judgment in FSS Trustee Corporation v Eastaugh  VSCA 218.
The case concerned the meaning of "salary" for the purposes of calculating defined benefits under a particular trust deed definition applicable to hospital employees. It was held that because of the breadth of the word "including", "recall payments" which were paid to doctors were within the definition of salary regardless of whether they were paid regularly and periodically.
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