Have you been out of the workforce for a while? Or do you run your own small business? Then you especially need to be aware of the July 1st changes to superannuation. The updated regulations have been implemented to prevent insurance fees and premiums making a dent in your super, but there are some downsides to watch out for.
Maybe you’re taking a break, working overseas or just staying home with young kids. Whatever the case may be, a lapse in regular super contributions may have you flagged as an inactive account. If no contributions or rollovers are made for more than 16 months, your super account will be considered inactive. As a result, your death and total/permanent disability (TPD) insurance cover can even be cancelled.
Make sure you check in with your super fund to make sure you’re still covered, as losing your insurance might mean you lose the option of broad cover upon reactivation. If you have recent medical conditions or poor health, automatic cover might not even be an option at all.
Good news for fresh retirees between 65 and 74: you can now make voluntary contributions to your super without needing to meet the work test requirements. Instead, you need to have had less than $300,00 in your super at the end of the preceding financial year.
However, don’t get too excited, there is a limit on this. You can only do this once, in the following years you’ll need to do the work test in order to make any voluntary contributions.
In an effort to make super more transparent for employees, it is imperative for small business owners to be aware of their responsibilities with the 2019 changes. The most obvious consideration for small business owners will be making sure they stay on top of single touch payroll. As long as the ATO is getting regular and accurate updates on your operations, so do the employees.
If it sounds a bit overwhelming, don’t stress. Any errors can be corrected in the follow up report, and there are no penalty fees associated for fixing mistakes. Additionally, you can always seek a helping hand from the team at Accumulus Advisory, who know the system inside and out. Take advantage of expert advice and make sure you’re adjusting to the changes efficiently.
Have any questions about the changes in super and what you need to watch out for? Give us a call for advice you can trust.