The SMSF Association’s COVID-19 response Homepage The SMSF Association’s COVID-19 response Up-to-date as at 31 March 2020. The SMSF Association as a priority is actively monitoring the economic uncertainty resulting from COVID-19. We understand for you, your business and clients these are unchartered waters, and we will make every effort to help you navigate the challenges ahead and continue to ensure your member services are uninterrupted. Click on these titles to navigate our COVID-19 response page: Complimentary COVID-19 webinar registration White label document: early access of superannuation FAQ document Summary of latest announcements White label document: Government’s economic stimulus packages explained ATO answers – temporarily reducing rent and in-house assets Latest Government announcements – key superannuation measures Health announcements We will provide you with further details regarding upcoming initiatives as they are progressed. To assist us with tailoring our responses and best directing our resources to support you, please provide feedback here. Resources to assist you during this time Webinar ‘COVID-19 and what it means for the SMSF sector: PART 2’ – 0.75 CPD hours Our CEO, John Maroney, will present another interactive webinar on COVID-19 and what it means for the SMSF sector. This webinar will detail the latest information and resources that will assist you and your SMSF clients during this difficult period. You’ll have the opportunity to ask questions throughout the webinar. Register here for this complimentary, member-only webinar. White label document: early access of superannuation The Government recently announced measures that allow individuals affected by the economic impacts of COVID-19 access a limited amount of their superannuation early. Making the decision to access superannuation early is a significant one and if possible, should be encompassed by financial advice. You can brand this informative document with your organisation’s logo and contact details before sending to clients encouraging them to get in contact with you to discuss their specific circumstances in more detail. Click here to download the white label document. The SMSF Association’s COVID-19 FAQ We have collated and answered the most frequently asked questions regarding COVID-19 and what it means for the SMSF sector in this simple FAQ. Click here to download the FAQ document. (This document is up-to-date as at 30 March 2020) The SMSF Association’s COVID-19 summary document Over the past two weeks the Government has announced two economic stimulus packages to cushion the economic impact of the Coronavirus. A total of $189 billion is being injected into the economy by all arms of Government in order to keep Australians in work and businesses in business. This includes $17.6 billion for the Government’s first economic stimulus package, $90 billion from the RBA and $15 billion from the Government to deliver easier access to finance, and $66.1 billion in the recently announced economic support package. We’ve summarised all the major packages in easy to understand language for you and your SMSF clients. Click here to download the summary document. White label document: COVID-19: The Government’s economic stimulus packages explained To assist you in communicating the important superannuation measures that your SMSF clients should be aware of, download our latest white label document. You can brand with your organisation’s logo and contact details before sending to clients encouraging them to get in contact with you to discuss their specific circumstances in more detail. Click here to download the white label document. Complimentary webinar recording for SMSF Association members – 0.75 CPD hours Our CEO, John Maroney, presented an interactive webinar, ‘COVID-19 and what it means for the SMSF sector’. John outlined the latest developments including the Government’s economic stimulus packages and how they affect you and your SMSF clients. This webinar also highlighted information and resources that will assist you and your SMSF clients during this difficult period. Webinar recording available here. Click here to access the Legs & Regs webinar that John referenced throughout the COVID-19 update. How we are working to support you: Advocating to Government We have made further representation to Government and the Australian Taxation Office for the deferral of SMSF lodgement, rent concessions, in-house asset breach relief and TBC shocks. Click here to read that letter. We have made representation to the Government, for temporary relief to be put in place for minimum pension withdrawals. Click here to read that letter. We are in the process of, and will continue to represent member concerns to the Government and ATO. We will remain alert to further opportunities to request relief (financial or otherwise) for SMSF members and their advisers including the increased need for Specialist advice. Providing you with information to reassure your clients and keep them up to date Your clients may have already contacted you in relation to the economic downturn, their investments and health issues. We will be providing information on SMSF strategies that you can share with your clients to assist them during this period of uncertainty. Reducing impacts on you as a business owner and manager Whilst we don’t currently have all the answers, we are exploring how we can best support you and your staff during this challenging time as a matter of urgency. Maintaining your SMSF knowledge to assist your clients We are working through how we continue to deliver CPD amidst change including an increased focus on online opportunities to enable you to meet your CPD requirements across the industry. Ensuring uninterrupted access to our Technical Research Service and existing CPD and education programs. Australian Taxation Office announcements The SMSF Association is pleased to announce that the ATO has responded to our requests for guidance regarding rent concessions and in-house assets. Please see their guidance below: Temporarily reducing rent Question: My SMSF owns real property and wants to give my tenant – who is a related party – a reduction in rent because of the financial impacts of the COVID-19. Charging a related party a price that is less than market value is usually a contravention. Given the impacts of the COVID-19, will the ATO take action if I do this? Answer: Some landlords are giving their tenants a reduction in or waiver of rent because of the financial impacts of the COVID-19 and we understand that you may wish to do so as well. Our compliance approach for the 2019–20 and 2020–21 financial years is that we will not take action where an SMSF gives a tenant – who is also a related party – a temporary rent reduction during this period. In-house asset restrictions Question: The downturn in the share market may result in the fund’s in-house assets being more than 5% of the fund’s total assets. The in-house asset rules would be breached. What do I need to do? Answer: If, at the end of a financial year, the level of in-house assets of a SMSF exceeds 5% of a fund’s total assets, the trustees must prepare a written plan to reduce the market ratio of in-house assets to 5% or below. This plan must be prepared before the end of the next following year of income. If an SMSF exceeds the 5% in-house asset threshold as at 30 June 2020, a plan must be prepared and implemented on or before 30 June 2021. However, we will not undertake compliance activity if the rectification plan was unable to be executed because the market has not recovered or it was unnecessary to implement the plan as the market had recovered. Visit the ATO’s website to read more of their COVID-19 questions and answers. Government announcements – Key superannuation measures Temporarily reduce superannuation minimum drawdown rates The Government is temporarily reducing superannuation minimum drawdown requirements for account based pensions and similar products by 50 per cent for 2019-20 and 2020-21. This measure will benefit retirees by providing them with more flexibility as to how they manage their superannuation assets. Click here for the fact sheet. Early release of superannuation The Government will allow individuals in financial stress as a result of the Coronavirus to access up to $10,000 of their superannuation in 2019-20 and a further $10,000 in 2020-21. Eligible individuals will be able to apply online through myGov for access of up to $10,000 of their superannuation before 1 July 2020. They will also be able to access up to a further $10,000 from 1 July 2020 for another three months. They will not need to pay tax on amounts released and the money they withdraw will not affect Centrelink or Veterans’ Affairs payments. Click here for the fact sheet. The ATO has released the following details regarding an early release for SMSF members: If your member is eligible, they can apply through myGov from mid-April. The ATO will issue them with a determination advising of their eligibility to release an amount. When you receive the determination, you will be authorised to make the payment. Reducing social security deeming rates On top of the deeming rate changes made at the time of the first package, the Government is reducing the deeming rates by a further 0.25 percentage points to reflect the latest rate reductions by the RBA. As of 1 May 2020, the lower deeming rate will be 0.25 per cent and the upper deeming rate will be 2.25 per cent. The change will benefit around 900,000 income support recipients, including Age Pensioners. Click here for the fact sheet. Other economic stimulus measures There is a range of other economic stimulus measures available, in particular for small businesses to manage cash flow challenges and retain employees. These measures include: Temporary relief for financially distressed businesses Increasing the instant asset write-off Backing business investment Supporting apprentices and trainees Click the above dot points to read more detailed information about each measure. Boosting Cash Flow for Employers The Government is enhancing the Boosting Cash Flow for Employers measure it announced on 12 March 2020. The Government is providing up to $100,000 to eligible small and medium-sized businesses, and not for-profits (NFPs) that employ people, with a minimum payment of $20,000. These payments will help businesses and NFPs with their cash flow so they can keep operating, pay their rent, electricity and other bills and retain staff. This measure will benefit around 690,000 businesses employing around 7.8 million people, and around 30,000 NFPs (including charities). The Government has budgeted $32 billion for this measure and many SMSF Association members would be eligible to receive up to $100,000. Click here for the fact sheet. Legislation to give these measures effect is expected to be introduced into Parliament in late March 2020. The Australian Taxation Office has also announced a range of administrative support measures, more details can be found here. Health announcements During this period, we ask that you follow the recommendations and advice on the Australian Federal and State Government Health Departments and the World Health Organization websites.