The federal government has released new draft regulations for superannuation co-contributions for low-income earners ahead of the expiration of existing regulations at the end of the first quarter of next year.
The draft Superannuation (Government Co-contribution for Low Income Earners) Regulations 2022 will replace a set of regulations with the same name from 2004 that are scheduled to cease operation on 1 April 2022.
Superannuation, Financial Services and the Digital Economy Minister Jane Hume said there were two substantive changes in the draft regulations and a range of minor changes.
The major changes included amending the definition of an eligible account that can receive super co-contribution payments to exclude those that only provide terminal medical condition benefits, in addition to the existing exclusion on accounts that offer only death or incapacity benefits.
“This change is consistent with the intention that the super co-contribution payment not be paid to insurance-only accounts, where the contribution would subsidise the payment of insurance premiums rather than contribute to increasing an individual’s retirement savings,” Hume said.
In addition, the draft will clarify the operation of section 7 relating to where a government co‑contribution can be directed in specific circumstances, with the draft regulations ensuring only one item will apply in the event of multiple circumstances being applicable.
“The draft regulations improve the 2004 regulations by omitting redundant provisions, simplifying language and restructuring provisions for ease of navigation,” Hume said.
“This includes minor changes to increase the use of headings and references to ‘section’ rather than ‘regulation’ in accordance with modern drafting practice.”
Access to the draft legislation and its explanatory statement has been made available via Treasury’s website and consultation will be open until 14 January 2022.