Proposal to increase maximum members in SMSF to 6, finally passed in Parliament.
A Superannuation Bill that has been before Parliament for some time – increasing the maximum allowable number of members in a SMSF from four to six – has finally passed in Parliament. This Bill is still to receive Royal Assent, but it is expected that the new rules will commence from 1 July 2021.
If you are wanting to increase the number of SMSF members in your Fund, you will need to review the Fund’s trust deed, to ensure that it allows for the increase of members to the Fund. If a corporate trustee exists, you may also need to amend the constitution.
Bring-forward extended for individuals 65 & 66 years
Effective from 1 July 2020, individuals aged 65 and 66 are now permitted to trigger the bring-forward rule (ie make up to three years of contributions in one year) when making non-concessional contributions – providing they are eligible based on their total super balance at 30 June prior year.
These changes are in line with the legislative changes that increased the threshold for individuals to make contributions without requiring to meet the ‘work test’, with individuals now not required to meet the work test in order to contribute to super until they are 67 years.
Other amendments that form part of this Bill include:
- Allowing members to re-contribute COVID-19 early release amounts without penalty; and
- the removal of the Excess Contribution Charge (ECC) in situations where an individual has exceeded their concessional contributions cap through no fault of their own (for example, where super guarantee received on wages is above the concessional contribution cap).