Treasury announce easier access to U.S. markets for Australian investors

25th August 2008:
Treasury has announced today, the 25th August 2008, a new arrangement between Australia and the U.S. which will pave the way for easier access by investors and financial markets to each other’s financial systems. This is the 3rd such agreement entered into by Australia, the other agreements being with New Zealand and China

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New approach to temporary resident superannuation

8th August 2008:
A new administrative approach for temporary residents will mean their superannuation will remain in their fund while they are in Australia and they will continue to be able to take their superannuation with them when they depart according to the announcement released today by treasury.

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Access to super for members with a terminal medical condition

28th August 2008:
Changes have been made to the Income Tax Assessment Act 1997 and Superannuation Industry (Supervision) Regulations 1994 that allows people with a terminal medical condition to access their benefits from their super fund tax-free. These changes are effective from 1 July 2007.

You can release super benefits to a member if they have a terminal medical condition. A terminal medical condition exists if:

• two registered medical practitioners have certified jointly or separately, that the member suffers from an illness, or has incurred an injury that is likely to result in the member’s death within 12 months of the date of certification
• at least one of the registered medical practitioners must be a specialist practicing in an area related to the illness or injury, and
• for each of the certificates, the certification period has not ended.

If they satisfy this condition of release, any benefits that have accrued up to that point in time become unrestricted non-preserved. These can be accessed as a tax-free super lump sum payment during the certification period.

Any benefits that accrue after the certification period are not covered by this condition of release and should talk to you about what new certification may be required.

How are payments made as a result of a terminal medical condition taxed?
A payment must be made as a super lump sum payment. These payments are non-assessable non-exempt income (that is tax-free), if the member has the required medical certification stating that at the time of the payment or within 90 days or receiving the payment, a terminal medical condition existed.

What payments are tax-free as a result of a terminal medical condition?
Payments to a member with a terminal medical condition will be tax-free if paid from a complying super plan (as long as the certification requirements are met).

A complying super plan includes:

• a super fund
• a public sector super scheme that is
• a regulated super fund, or
• an exempt public sector super scheme
• an approved deposit fund, or
• a retirement saving account provider.

This also applies to amounts that are:

• super lump sums paid from the commutation of a super annuity
• a super guarantee payment
• a small super account payment
• a unclaimed money payment, or eligible to receive a refund of the amount withheld.

The required medical certification must state  that at the time of the payment, or within 90 days of receiving the payment, they had a terminal medical condition.

For further assistance in relation to this matter please contact your Sothertons office.