These reforms are set to deliver major changes to Australia’s superannuation system. Stronger Super will impact super funds, their members and employers.
The aim of the reforms is to create a more efficient super system focused on the best interest of members.
Some elements of the reforms are:
MySuper is a simple, low-cost superannuation product that will replace the current default products and become the new default superannuation fund for businesses.
MySuper has been introduced to help simplify and give greater transparency to superannuation systems. MySuper accounts will offer lower fees and simpler features, so members will not have to pay for services they do not need.
As of 1 January 2014, businesses must be paying their superannuation contributions to an authorised MySuper fund. Business owners only need to choose a new super fund if their current one is not MySuper authorised.
Employees are still able to select their own fund, or manage their superannuation affairs through a self-managed superannuation fund.
SuperStream is the name for a range of proposals designed to improve the processing of everyday superannuation transactions.
SuperStream is aimed at increasing the processing speed of transactions, reduce error and remove human involvement from the system to reduce the time between the employer’s contribution being made and its allocation into the members account.
From 1 July 2014, employers with 20 or more employees will have to be compliant with SuperStream, and smaller employers will have to be compliant from 1 July 2015.
Individuals with a SMSF will need to provide their employer with their fund’s ABN, bank account details and electronic service address to ensure they comply with the superannuation changes.
This information should be provided by 31 May 2014 to ensure that the individual’s super does not go into a default fund.
Claiming deductions for plant and equipment
Due to the potential changes affecting capital allowances, it is important that businesses understand what they are entitled to this year end.
Business owners should make sure they are aware of the changes.
The capital allowances for small business entities this year end is:
- small business entities would be able to claim a deduction for the value of a depreciating asset that costs less than $1000 (rather than the $6500 before 1 January) in the income year in which the asset is first used or installed ready for use
- small business entities would be able to claim a deduction for an amount included in the second element of the cost of a depreciating asset that was first used or ready to use in the previous income year
- small business entities would be able to allocate depreciating assets that cost $1000 (rather than the $6500 before 1 January) or more to their general small business pool and claim a deduction for the depreciation of the assets in the pool
- assets allocated to the general small business pool would depreciate at a rate of 15 per cent in the year they are allocated and a rate of 30 per cent in subsequent years
- if the value of a small business entity’s general small business pool is less than $1000 (rather than $6500 before 1 January) at the end of the income year, the small business entity would be able to claim a deduction for the entire value of the pool