Good News: A “Nothing” Federal Budget for Superannuation

Good News: A “Nothing” Federal Budget for Superannuation

In a welcome respite from years of major changes, there wasn’t much in last night’s Federal Budget about superannuation. The few changes were relatively minor and non-controversial, including:

  •       Permanent Capital Gains Tax relief for merging super funds
  •       Relaxed contribution rules for older Australians
  •       Increased funding for regulators
  •       Adjustments to reflect the final Protecting Your Super Act
  •       Establishment of a Superannuation Consumer Advocate

The changes announced in the Budget require legislation. Parliament will sit for the next few days, but an election on 11 May is likely to be called on this coming Sunday or Monday.

We have detailed the superannuation changes in the Budget below:

The Government has announced permanent Capital Gains Tax relief for merging funds. Previously, this relief has been granted on a temporary basis. There are likely to be significant fund mergers in the near future and this will ensure some members receive an increased benefit.

From 1 July 2020, 65 and 66 year-olds will be able to make voluntary contributions (both concessional and non-concessional) to their superannuation without having to meet a work test. Currently, people aged 65 and over have to work for a minimum 40 hours over a 30 day period in the relevant financial year.

People aged 65 and 66 will also be able to make up to three years of non-concessional contributions under the bring-forward rule. People up to and including age 74 will be able to receive spouse contributions, with those 65 and 66 no longer needing to meet a work test. Currently, people aged 65 to 74 can only make voluntary contributions if they work a minimum of 40 hours over a 30 day period in a financial year. People aged 65 and over cannot access bring-forward arrangements and those aged 70 and over cannot receive spouse contributions.

The Government says that aligning the work test with the eligibility age for the Age Pension (scheduled to reach 67 from 1 July 2023) and increasing the age limit for spouse contributions to 74 will give older Australians greater flexibility to save for retirement.

The Government will provide $42 million over the next few years for the ATO to recover unpaid tax and superannuation liabilities including from large corporate entities and high wealth individuals.

They will ramp up regulator spending by more than $640 million, including:

  • over $400 million to ASIC to support its new enforcement and supervisory strategies
  • over $150 million to APRA to strengthen supervision and enforcement
  • over $35 million for a new criminal jurisdiction of the Federal Court.

As a result of the Government agreeing to amendments to the Protecting Your Super Package the  Budget was amended to take account of:

  • extending to 16 months the period after which an account that has not received any contribution is considered inactive;
  • expanding the definition of when an account is considered active for the ATO-led consolidation regime; and
  • requiring the ATO to consolidate to an active account, where possible, within 28 days of receipt.

The Government has also announced its intention to establish a Superannuation Consumer Advocate and called for expressions of interest.

We would love to hear what you think of the changes announced in the Federal Budget. Leave us your thoughts and comments below. If you would like to find out more about how these changes will impact you, you can contact us at


Written by David Haynes

Super’s Biggest Challenges in Insurance Claim Handling

Super’s Biggest Challenges in Insurance Claim Handling

The introduction of the Insurance in Superannuation Voluntary Code of Practice has meant greater consequences for funds that fail to comply. Should the Code become binding and enforceable, as recommended by the Royal Commission, then the consequences of non-compliance go one to become far more significant. It is more important than ever that funds have the right tools and processes in place to ensure they are able to make the right calls.

Last week, IQ Group ran their second discussion group on Claims Handling under the Code of Practice. Attendees of the discussion covered the range of challenges they were facing and discussed potential solutions. Here are some of the biggest challenges that were identified.

Reduced Claims Handling Timeframes

With the reduced timelines under the code, it is more important than ever to clarify at an early stage whether a member is making a claim, a complaint or some other contact.

Claims that are lodged late, or that have multiple or changing elements, were identified as being particularly difficult. Managing expectations was identified as key, with participants emphasising that funds shouldn’t make representations they cannot meet.

It may be difficult for large funds to be able to guarantee that a claimant was always able to talk to the same primary contact person, although some are able to do this.

Visibility of Member Information

There was significant discussion around the lack of visibility and access to relevant member information.

It was proposed that there should be a single, comprehensive view of claimant members to improve the member experience and the efficiency of claims handling. During the discussion, it was also was noted that the Insurance in Super Working Group recommended the development of functionality that could be owned by funds and cover all interactions with insurers, administrators, medical, legal and rehabilitation providers.

MAAS is Creating Volumes of Work

New reporting of changes to member details to the ATO (MAAS services) has led to increased reporting of deceased members to super funds – and these increased volumes are likely to continue. Many of these deceased members have died years ago but are only now triggering death claim processes due to the introduction of MAAS.

There is uncertainty about what reasonable steps need to be taken to pay unclaimed death monies (eg, notices in newspapers). Trustees need a policy to deal with unpaid death benefits. It was noted that unclaimed death benefits didn’t necessarily involve insurance claims but might just relate to the members superannuation benefit. IQ Group will therefore be drafting an unclaimed death monies policy and we will be providing this to those that participated in the recent claims handling discussion groups.

Identifying Vulnerable Members

There was discussion around how funds addressed vulnerable consumers. As the identification of a vulnerable member can be somewhat subjective, it is an area that warrants further discussion and definition. Vulnerable members need to be clearly identified, along with a rationale for their inclusion and an articulation of their additional needs. The discussion group identified a need for adequate reporting tools (eg, in workflow management systems) to capture these members and their contacts with the fund.

If you have identified any of these issues in your claims handling processes and would like to discuss possible solutions to these issues, you can reach out to us at