The Tax and Superannuation Laws Amendment (2014 Measures No 1) Bill 2014 was introduced in the House of Reps on Wed 26.2.2014. It proposes to:

  • phase out the net medical expenses tax offset with transitional arrangements for those currently claiming the offset, to give people time to adjust. From 1 July 2013, those taxpayers who claimed the offset for the 2012-13 income year will continue to be eligible for it for the 2013-14 income year if they have eligible out-of-pocket medical expenses above the relevant thresholds. Similarly, those who claim the offset in 2013-14 will continue to be eligible to claim it in 2014-15. In addition, the offset will be available for taxpayers whose out-of-pocket medical expenses relate to disability aids, attendant care or aged care. For these taxpayers, the offset will remain available for these expenses until 1 July 2019. DATE OF EFFECT: will apply from 1 July 2013 with the transitional arrangements and the tax offset ceasing on 1 July 2019;
  • amend the Superannuation Industry (Supervision) Act 1993 (SIS Act) to introduce civil and criminal penalties for promoters of schemes that have resulted, or are likely to result, in the illegal early release of superannuation benefits. Promoters of illegal early release schemes will face civil and criminal penalties including a monetary penalty of up to $340,000 (2,000 penalty units) or imprisonment of up to 5 years. DATE OF EFFECT: will apply to actions that occur after Royal Assent;
  • amend the SIS Act to introduce administrative directions and penalties for contraventions relating to self-managed superannuation funds. The amendments would provide the Commissioner with the power to give rectification directions, such as a direction that a trustee ensure that the fund begin complying with the relevant legislation and education directions to ensure that a trustee’s knowledge of the relevant legislation comes up to the requisite standard. The amendments will also permit the regulator to impose administrative penalties on self-managed super fund trustees for certain contraventions of the superannuation law. DATE OF EFFECT: will apply to contraventions that occur on or after 1 July 2014;
  • amend the list of deductible gift recipients (DGRs) identified by name in Div 30 of the ITAA 1997. Three organisations are being added to the Act, namely the National Arboretum Canberra Fund, Bali Peace Park Association Inc., and the Prince’s Charities Australia Limited. One organisation, the Sir William Tyree Foundation, has changed its name and needs to be relisted in the Act. DATE OF EFFECT: various.

[LTN 38, 26/2/14]