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Reform of SMSF levy arrangements

The Government has made reforms to supervisory levy arrangements for self managed superannuation funds (SMSF).

Superannuation funds are required to pay an annual supervisory levy to the regulator of the fund. For SMSF’s, the regulator is the ATO.

The changes made are:

-the timing for collection of the levy

-an increase to the levy ensuring that the ATO’s regulatory costs are fully covered

The payment of the SMSF levy will be brought forward. It will now be levied and collected in the same financial year.

This is consistent with the Australian Prudential Regulation Authority (APRA) regulated funds, which pay the superannuation supervisory levy in the same financial year it is levied.

This change in the timing of the collection of the SMSF levy will be phased in over two years, allowing the time needed for the SMSF to adjust. Transitional provisions apply to the levy for the 2013-14 year of income so that it is payable in two instalments.

Currently, there is a shortfall of SMSF levy revenue compared to the costs of regulating the sector. The Government will increase the annual SMSF levy from $191 in 2012-2013 to $259 from 2013-2014 and onwards to ensure full cost recovery. This increase in cost will allow the ATO to continue to regulate the rapidly growing and diverse sector effectively.

Posted on 7 March '14 by , under Super.

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Transition to retirement

The transition to retirement (TTR) strategy allows you to access some of your super while you continue to work.

You are able to use the TTR strategy if you are aged 55 to 60. You can use it to supplement your income if you reduce your work hours or boost your super and save on tax while you keep working full time.

  • Starting a TTR pension: To start your TTR pension, transfer some of your super to an account-based pension. You have to keep some money in your super account so that you can continue to receive your employer's compulsory contributions as well as any voluntary contributions you may be making.
  • Government benefits and TTR: The benefits you or your partner receive might be impacted if you choose to opt for this strategy. How and what exactly will change might become clearer upon discussing this with a Financial Information Service (FIS) officer.
  • Life insurance and TTR: In some cases, the life insurance cover you have with your super may stop or reduce if you start a TTR pension – check this before making any decisions or changes.

TTR can help ease your mind as you transition into retirement but it can be a bit complex. Before you choose whether you want to use TTR to reduce work hours or save on tax, or even if you want to use TTR altogether, you should figure out how this will impact all aspects of your finances.

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