Federal Budget Update – The Economic Recovery Plan for Australia is all about jobs

The 2020-2021 Federal Budget is all about jobs, jobs and jobs. COVID-19 has resulted in the most severe global economic crisis since the Great Depression. This Budget provides an additional $98 billion of response and recovery support under the COVID-19 Response Package and the JobMaker Plan.

Pleasingly, the Government committed to their election promise that there will be no adverse tax changes to the superannuation system. In addition, for the first time in a number of years, there were no measures specifically relating to SMSFs in this year’s Budget.

The key superannuation reform however in the Budget was the introduction of a new default system where superannuation will follow an individual when they change jobs, reducing the number of duplicate accounts held by employees.

Tonight’s Budget summary of key superannuation, retirement income, personal tax and other relevant changes include:

  • A YourSuper portal to compare MySuper funds
  • ‘Stapled’ superannuation accounts – a new default system
  • Increased benchmarking tests on APRA funds
  • Improved transparency and accountability of super funds by strengthening obligations on trustees
  • Personal income tax cuts
  • JobMaker Hiring Credit wage subsidy
  • Other measures such as ECPI changes, COVID related relief and deferring the start date of the Retirement Income Covenant.

At the time of publishing, the contents of this resource were accurate and correct.

Disclaimer: Technical Papers contain general advice only and are prepared without taking into account particular objectives, financial circumstances and needs. The information provided is not a substitute for legal, tax and financial product advice. Before making any decision based on this information, you should assess its relevance to the individual circumstances of your client. While the SMSF Association believes that the information provided is accurate, no warranty is given as to its accuracy and persons who rely on this information do so at their own risk. The information provided in this bulletin is not considered financial product advice for the purposes of the Corporations Act 2001. © SMSF Association