The new rules governing superannuation fund contributions to take effect on 1 July will present an administrative challenge for SMSF service providers due to the traditional lag in fund reporting, a sector specialist has noted.
SuperGuardian education manager Tim Miller said the changes to the contributions legislation will create the biggest issue for auditors as their role in the main is performed retrospectively.
“[The work test change] doesn’t really come in for our auditors for really another 15 months … if we’re looking at the fact that most auditors are currently finalising the 2020/21 audit, and we’ve got the 2021/22 financial year [accounts yet] to be audited and lodged, both of those years incorporate the work test and the requirement to satisfy the work test when making contributions,” Miller said.
“So these rules are exceptionally relevant right now and from an audit point of view it won’t be until they start looking at the 2022/23 [financial statements] that they have to contemplate [the amended] work test requirements.”
Conversely, SMSF administrators, advisers and accountants will be turning their attention to the new contribution rules immediately from 1 July, he noted.
“So it’s important to still clarify the 2020/21 rules. [As a reminder] anyone up to age 67 can make any type of contribution and downsizer [contributions] are obviously excluded for [individuals] under age 65. That’s how it currently sits,” he said.
He described the existing rules as convoluted because the age thresholds, such as those for non-concessional contributions and the downsizer contributions, do not align. As such, he said trustees will welcome the changes to be introduced on 1 July.
“Where we’re heading to will be far cleaner with respect to the trustee’s obligations and the trustee’s responsibilities [with regard to making and accepting fund contributions],” he said.
