Legislative update (Acts): To be, or not to be… (Part 2)

Despite parliament having been dissolved ahead of the 2019 federal election, a number of Bills managed to scrape through and have now become Acts (legislation) before this occurred.

We take a closer look at the details of several of these pertaining to social security, superannuation and taxation. Also, given the upcoming election (and the possibility of change), we provide context around who introduced them into parliament.

Social security

Social Services Legislation Amendment (Energy Assistance Payment) Bill 2019

In summary, this provides a one-off energy assistance payment to recipients of the age pension, disability support pension, carer payment, parenting payment, AUSTUDY payment, double orphan pension, newstart allowance, partner allowance, sickness allowance, special benefit, farm household allowance, widow allowance, widow pension B, wife pension, youth allowance, and certain veterans’ payments, who are payable and residing in Australia on 2 April 2019.

The rate of payment will be $75 for singles (and couples separated by illness) and $62.50 for each eligible member of a couple, and it’s anticipated the payment will be received by recipients prior to 30 June 2019. Also, the payment will be exempt from taxation and not count as income for social security purposes.

For context, this was introduced into parliament by the Social Service portfolio (Government) on 3 April 2019 and received royal assent on 5 April 2019.

Social Services and Other Legislation Amendment (Supporting Retirement Incomes) Bill 2018

In summary, this:

• establishes new means test rules (e.g. regarding the age pension) to encourage the development and take-up of lifetime retirement income products (e.g. certain annuity products) that can help retirees manage the risk of outliving their savings
  • the income test will assess 60% of all product payments as income
  • the assets test will assess 60% of the nominal purchase price until the person reached the life expectancy of a 65-year-old male (currently age 84) – or a minimum of five years – and then 30% of the purchase price for the rest of the person’s life
• amends the Work Bonus
  • increases the fortnightly Work Bonus income concession from $250 to $300
  • increases the income concession bank from $6,500 to $7,800
  • expands the definition of income eligible for the Work Bonus to include income earned from gainful work that involves personal exertion, for example, self-employment
• amends the Pension Loans Scheme (PLS)
  • increases the maximum PLS plus pension/payment amount to 150% of the maximum rate of the pension/payment (plus any available supplements)
  • allows people receiving the maximum rate of pension/payment to access the PLS
  • allows those of age pension age, income support supplement qualifying age or service pension age who would not be eligible to receive any pension/payment under both the income or assets test to access the PLS

Please note: This applies from 1 July 2019.

For context, this was introduced into parliament by the Families and Social Services portfolio (Government) on 29 November 2018 and received royal assent on 1 March 2019.

Superannuation

Treasury Laws Amendment (2019 Measures No. 1) Bill 2019

In summary, a portion of this sought to:

• increase the maximum number of allowable members in self-managed superannuation funds (SMSFs) from four to six
• align provisions that relate to SMSFs and small Australian Prudential Regulation Authority funds with the increased maximum number of members for SMSFs

However, this portion was removed before receiving royal assent. One of the measures passed extended concessional rates of excise to certain beer brewers.

For context, this was introduced into parliament by the Treasury portfolio (Government) on 13 February 2019 and received royal assent on 5 April 2019.

Treasury Laws Amendment (Protecting Your Superannuation Package) Bill 2018

In summary, this:

• prevents trustees from
  • charging certain fees and costs exceeding 3% of the balance of a MySuper or choice product annually where the balance of the account is <$6000
  • charging exit fees on all superannuation accounts, regardless of a member’s balance
  • providing opt-out insurance to members with inactive (have not received a contribution or rollover in the previous 16 months) MySuper or choice accounts, unless a member has directed otherwise
• requires trustees to transfer inactive low-balance (<$6,000) MySuper or choice accounts to the ATO, and the ATO will be given greater capacity to proactively reunite Australians (and their active account) with their lost and inactive superannuation

Importantly, a member’s inactive low-balance account may still be considered active (and not transferred to the ATO), where the following occurs:

• the member changes their investment options
• the member makes changes in relation to their insurance coverage
• the member makes or amends a binding beneficiary nomination
• the member, by written notice given to the ATO Commissioner, declares that they weren’t a member of an inactive low-balance account
• the superannuation provider was owed an amount in respect of the member

Please note: This applies from 1 July 2019.

For context, this was introduced into parliament by the Treasury portfolio (Government) on 21 June 2018 and received royal assent on 12 March 2019.

Taxation

Treasury Laws Amendment (Increasing and Extending the Instant Asset Write-Off) Bill 2019

In summary, this:

• increases the threshold below which small business entities (with an aggregated annual turnover of less than $10 million) can access an immediate deduction for depreciating assets and certain related expenditure (instant asset write-off) from $25,000 to $30,000
• enables medium-sized businesses (with an aggregated annual turnover of $10 million or more, but less than $50 million) to access instant asset write-off for depreciating assets and certain related expenditure costing less than $30,000

Please note: This applies from 7.30pm (AEDT) on 2 April 2019 to 30 June 2020.

For context, this was introduced into parliament by the Treasury portfolio (Government) on 13 February 2019 and received royal assent on 6 April 2019.

Treasury Laws Amendment (Medicare Levy and Medicare Levy Surcharge) Bill 2019

In summary, this increases the Medicare levy and Medicare levy surcharge low-income threshold amounts for individuals, families and individual taxpayers and families eligible for seniors and pensioners tax offset (SAPTO) for the 2018-19 income year:

• individual income threshold is $22,398 ($21,980, 2017-18 income year)
• family income threshold is $37,794 ($37,089, as above)
• income threshold for individual taxpayers eligible for SAPTO is $35,418 ($34,758, as above)
• income threshold for families eligible for SAPTO is $49,304 ($48,385, as above)
• child-student component of the income threshold for families (whether eligible for SAPTO or not) is $3,471 ($3,406, as above)

• And, increases the phase-in limits as a result of the increased threshold amounts
  • individual phase-in limit is $27,997 ($27,475, 2017-18 income year)
  • phase-in limit for individual taxpayers eligible for the SAPTO is $44,272 ($43,447, as above)

For context, this was introduced into parliament by the Treasury portfolio (Government) on 2 April 2019 and received royal assent on 5 April 2019.

Click here for part one of our two-part series where we look at several Bills that lapsed due to the dissolution of parliament.

If you have any questions regarding this article, then please do not hesitate to contact us.