Proposal to Opt-Out of Superannuation Guarantee

The government has reintroduced a series of superannuation proposals into parliament which lapsed when the election was called in April. The Treasury Laws Amendment (2018 Superannuation Measures No1) Bill 2019 is currently sitting before the House of Representatives and includes a measure to allow certain employees to opt-out of compulsory superannuation guarantee (SG).The proposed measure will allow high-income earners who have multiple employers to opt-out of receiving compulsory SG contributions from one of their employers.

The benefits of this measure will be felt mostly by those who regularly breach their concessional contribution caps for reasons out of their control. A side benefit to the proposal is that those who choose to take the opt-out measure would have the opportunity to negotiate with their employer to have the opted-out amount paid as additional salary.

It is proposed that to opt-out of compulsory SG contributions from one employer, an employee would need to apply to the Commissioner of Taxation for an exemption certificate to provide to their employer. In order to be eligible for an exemption certificate, an employee must be able to prove that they have multiple employers that are obligated to pay compulsory SG contributions and that they are likely to have excess concessional contributions for the financial year due to this fact.

Further information will be provided once the Bill has received Royal Ascent in regards to the requirements to apply for an exemption certificate. If you wish to discuss these proposed measures, please contact your Oxygen Private Clients or Lumiere Private Advisory client manager.

Further reading: Article Links

Treasury Laws Amendment (2018 Superannuation Measures No 1) Bill 2019

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