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Superannuation

Cross bench key to larger SMSFs

six-member SMSFs

Any chance the government has of allowing the creation of six-member SMSFs rests with the minor parties in the Senate.

The federal government will still require cross-bench support to progress its plans to introduce six-member SMSFs, which remain stalled in the Senate despite a review advising that the legislation be passed.

SMSF Association deputy chief executive and policy and education director Peter Burgess said the introduction of legislation into the Senate in September 2020 was the government’s second attempt to introduce the change and it was hoping for better support from the minor parties.

“This is the second time the government has tried to change legislation to allow up to six members to be members of an SMSF,” Burgess said during a presentation at last week’s virtual SMSF Association National Conference 2021.

“They did try just prior to the 2019 federal election, but had to remove the measure from the bill because they did not have the numbers back then, but with a slightly friendlier cross bench they are going to try again.”

He noted the Labor Party did not support the change and claimed the government had not made a strong enough case for the increase in the maximum number of SMSF members, but he highlighted a Senate review committee had recommended the change.

“The bill was first announced in the 2018 federal budget and introduced into the Senate on 2 September 2020 and was referred to a Senate committee on 3 September,” he said.

“That committee has come back to the Senate and recommended that parliament pass this bill and that is not surprising when looking at the composition of the committee that met to review this bill.

“These types of committees can only have six members, but the composition must have three members of government, two members from the opposition and one member representing the minor parties.

“What was interesting was there was no dissenting report from the independent member and we think that is significant and may suggest the minor parties are prepared to support this bill in the Senate.”

Also speaking at the conference, Superannuation, Financial Services and the Digital Economy Minister Jane Hume said the limit of four members was a barrier to those who wanted to include more family members in their SMSFs and plans to change it were still active.

“The government understands that this is a barrier and is committed to seeing passage through the Senate this year,” Hume said.

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