2019 Tax Planning for Small Business Entities (SBE)
Have you been taking a break from work or have a neglected super account? If you had an inactive super account for more than 16 months and/or a balance of less than $6,000, here is what you need to know.
From 1 July 2019, the Federal Government’s Protecting Your Super Package Act will come into effect. It is designed to protect your super savings from unnecessary erosion by fees and insurance costs by:
• Canceling insurance premiums (such as life insurance, total and permanent disability insurance, and income protection insurance) for inactive accounts*
• Capping the administration and investment fees at 3% on your account with a balance below $6,000
• Transferring your inactive account which has a balance of less than $6,000 to ATO which you pay $0 in fees.
This is good news for many, however, for others who have been taking a break from work with their super account inactive for more than 16 months, it could be a lost of insurances and potential claims. Here are what you need to do:
• Let your super fund know (opt-in) if you still want to keep the insurance
• Make contributions or rollovers to re-activate your super account
• As general advice, merge multiple super accounts (if you have) into one so that you are not paying extra fees and premiums
*An account is considered to be inactive if it has not received any contributions or rollovers for more than 16 months.