As we move into the 2013/14 financial year, here’s a snapshot of a number of changes Trustees should be aware of for superannuation and SMSFs in particular.

Superannuation Guarantee contributions increase

Potentially the most significant change that will affect superannuants is the increase in the minimum Superannuation Guarantee contribution from 9% to 9.25%.  Superannuation guarantee is the compulsory super payments employers are required to pay to employees. It is set to increase from 9% to 12% by 2019. This increase may actually see the take home cash component of employee salaries declining for those on fixed inclusive contracts. 

Increase in concessional contribution cap for people over 60

The concessional cap is set to increase from $25,000 to $35,000, with an increase for those over 50 to take effect from 1 July 2014.

Superannuation Guarantee contributions kick in for those over 70

There will now be an obligation for employers to make super contributions for employees over age 70. Previously there was no such requirement.

Pension minimums increased

All SMSF members with transition to retirement and account based pensions will need to increase the minimum amount withdrawn from their balance – as the Government’s pension relief offered during the market downturn has ended.

Recording assets at market value

All assets held by the SMSF need to be shown at market value. In the past this has usually been the case, however it has now become law.

Increase power to the ATO

The ATO will now have the power to force Trustees who have a compliance breach in their SMSF to enhance their education and training in relation to SMSFs. The ATO will also have enhanced powers with issuing administrative penalties, although for the first time, Trustees will be able to appeal penalties issued by the ATO through the Administrative Appeals Tribunal.

Increased responsibilities of SMSF Auditors

From 1 July 2013, SMSF Auditors need to be registered with ASIC and have enhanced requirements to qualify to conduct SMSF audits.

And…

The SMSF Supervisory levy enjoys a hefty hike from $191 to $259 for the 2013/14 financial year.

None-the-less, the year ahead is going to be an exciting one for SMSFs with assets set to exceed $500 billion and the number of accounts to top 1 million.