Legislation: Super Measure (No. 1) Bill 2019 Reintroduced

The Treasury Laws Amendment ( 2018 Superannuation Measures No. 1 ) Bill 2019 was introduced into the Parliament on 24 July 2019 . It re-introduces previous Bill measures (which lapsed due to the Federal Election), all three measures have effective date from 1 July 2018, including:

• Super Guarantee opt-out: high-income employees with multiple employers will be able to opt-out of the Super Guarantee (SG) regime to avoid unintentionally breaching the $25,000 concessional contributions cap. Such employees with income exceeding $263,157 will be able to apply to the ATO for an "employer shortfall exemption certificate". The ATO will only be able to issue an exemption certificate at the request of an employee (not the employer) who would otherwise be likely to exceed the concessional cap. Employees who take advantage of the opt-out provisions will be able to negotiate with their employer to receive additional cash or non-cash remuneration, instead of SG contributions. However, there is no requirement to show that the foregone contributions have actually been substituted for higher wages.
• Non-arm's length expenses: the non-arm’s length income (NALI) rules in s 295-550 of the ITAA 1997 will be expanded so that super funds are taxed at 45% for related-party schemes involving non-arm’s length expenses not incurred that would normally be expected to apply in a commercial transaction. The proposed amendments seek to ensure that super funds cannot circumvent the NALI rules by using non-arm’s length expenditure (rather than non-arm’s length income).
• LRBAs: a member’s share of the outstanding balance of certain limited recourse borrowing arrangements (LRBAs) will be included in the member’s total superannuation balance (TSB). The TSB will only be increased for members who have satisfied a Nil condition of release (e.g. permanently retired or attained age 65), or for a related-party LRBA between the SMSF and its "associate".