A technical specialist has recognised an unrestricted superannuation condition of release previously not considered applicable for the sector, in a practical sense, could increase in significance as a result of the new ability to establish six-member SMSFs.
Specifically, SuperGuardian education manager Tim Miller pointed out the condition of release that may now come into play more often for SMSFs allows an individual early access to their superannuation benefits if their asset balance is less than $200 and they have either lost or resigned from their job.
Miller predicted this may be the case as the inclusion of more family members is a realistic development stemming from the maximum number of members an SMSF can service increasing from four to six.
Further, he noted the Your Future, Your Super legislation allowing a nominated super fund to be ‘stapled’ to an individual for the duration of their working life is making this outcome even more likely.
“If we see more kids [being included in SMSFs], then we are going to have to look at issues such as the termination of gainful employment and what that actually means from a condition of release and access to superannuation monies [perspective],” he said.
To illustrate his point, he outlined a possible scenario that may soon begin to take place within SMSFs with younger family members in them.
“[For example] the kid joins the [SMSF], they get their first job where they have superannuation paid into it, but then they quit that job and they start to look at accessing super,” he said.
“What does that mean? If [the benefit] is less than $200, there are no taxation consequences with that, but it’s an area we need to be mindful of.”
According to Miller, this change in the superannuation system highlights one of the really important roles advisers can play for their SMSF clients.
“The whole [subject of] accessing super really comes down to us identifying those areas where there are cashing restrictions and those areas where there are none,” he noted.