The legislation containing the abolition of the work test for individuals up to the age of 75 has been passed, but one critical rule change is still required to avoid any potential compliance issues for SMSF trustees, a specialist lawyer has said.
DBA Lawyers director Daniel Butler said the changes to the work test rules must also be made to the Superannuation Industry Supervision (SIS) Regulations to make the process complete.
“It is the case that the SIS rules for admitting deductible contributions between the ages of 67 and 75 are now in the tax legislation in [section] 290-165 [of the Income Tax Assessment Act]. [But] the SIS Regs do need to be amended [as well],” Butler noted during a technical update webinar hosted last Friday.
“Unless the SIS Regs are amended, we could have a potential contravention issue on our hands.”
However, he pointed out while procedurally the steps required to properly legislate the work test rule change are straightforward, the practical implementation could be problematic due to the timing of the impending 2022 federal election.
To this end, amendments to the SIS Regulations are required to be tabled in parliament with a minimum 14 sitting-day period to allow objections to the changes to be raised, he noted.
However, there may not be 14 sitting days of parliament available due to the federal election, which is likely to be held in May.
Butler confirmed DBA Lawyers is performing a more detailed analysis of the situation to glean a better understanding of it.
This procedural quirk comes amid challenges he said are evident currently in the financial advisory community.
“We don’t do litigation [ourselves], but we are seeing a lot of litigation cases over advisers who are completely missing changes in the law,” he revealed.
“[These cases involve] Div 7A, family trust selections [and the] super guarantee. All of these other issues [are] just being overlooked [due to the fact of] practitioners being too busy,” he said.