Budget 2008 - Superannuation

The Federal Government has allowed the Better Super changes of the last 12 months to bed down, by not announcing any changes to existing arrangements in this years Federal Budget.  However other budget related changes affecting superannuation are as follows:

Income tested benefits

From 1 July 2009 income tests used to determine eligibility for a range of government financial assistance programs will be tightened to include forms of non-wage remuneration and, where appropriate, losses from discretionary activities.

This will be achieved by broadening the definition of income for income-tested benefits to include:

• Salary sacrifice super contributions;
• Net financial losses; and
• Reportable fringe benefits.

Super Clearing House

The Rudd Government will provide funding of $16.1 million over three year to the Tax Office to set up an optional Superannuation Clearing House (SCH) facility to cut the red tape burden on businesses.

Where employees can choose their own superannuation fund from the many hundreds available, an employer may be required to pay superannuation into a large number of different funds, a process that can be highly onerous.

A SCH will allow an employer to pay their contributions to a single location. The clearing house will then distribute them to the relevant superannuation funds as selected by their employees.

The optional clearing house facility will manage employers' obligations under Superannuation Choice, including the time consuming task of checking details entered on the Choice form and distribution of contributions to the nominated funds.

This facility will be offered free of charge by the Australian Government to small businesses with fewer than 20 employees and on a fee-for-service basis to larger businesses. The facility will be contracted to the private sector.

Businesses that use the clearing house facility will have their legal obligation to make superannuation contributions discharged when payment of the correct amount is made to the clearing house. The facility will be available from 1 July 2009.