The absence of significant measures affecting the SMSF sector in the October budget will see the focus move to enacting changes in the lead-up or as part of the May 2023 budget, according to the SMSF Association (SMSFA), which will continue to push for the simplification of thresholds and caps.
SMSFA policy manager Tracey Scotchbrook said the budget presented earlier this week was “more like a jumbo Mid-Year Economic and Fiscal Outlook, so we did not have any substantial or unexpected changes to superannuation or SMSFs”.
“We start to look forward to what might evolve between now and the May budget next year when we get a big budget from the Albanese government,” Scotchbrook said during a post-budget briefing by the association.
“We have seen the indexation of transfer balance caps has added a lot of complexity into the system because we have now got individual transfer balance caps depending on when a person commenced their retirement-phase pension and whether or not they have utilised all or some of the transfer balance cap.
“This is starting to get quite complicated and record-keeping needs to be really up to date along with transfer balance account reporting to ensure the indexation is applied appropriately.”
She noted the complexity was not limited to SMSF advisers and trustees, with regulators and software providers also having to revise their systems as a result of indexation.
“There is also the accessibility of information, which we know is a real pain point, and so we will keep red flagging this at every opportunity for financial advisers and SMSF administrators who can’t get access to these basic transfer balance cap, transfer balance account and contribution cap reports,” she said.
“One simple way of dealing with it would be to have a single cap for everyone so if indexation occurs, everybody has access to the same cap.
“The cost of getting it wrong can be high so if there is a delay in indexation or an adjustment in indexation because there was a delay in reporting, it can have some quite distorted outcomes.”