BGL is very concerned about the practical implementation of the indexation of the Total Balance Cap.
“It’s simply too complicated” said BGL’s Managing Director, Ron Lesh. “Indexing the $1.6m cap to $1.7m is not the problem – it’s the partial indexation where a person has already commenced a pension that is crazy.”
“There are 2 real problems with partial indexation.
1. Potentially every person can now have a different total balance cap, and
2. Access to ATO total balance cap data is not readily available.
This makes these changes a nightmare for SMSF advisers” says Lesh. “The ATO and Treasury have known for 2 + years that this will be a problem but have done nothing about it. BGL and many others have been asking for API access to ATO total balance cap data, but our requests have been ignored – it’s simply not good enough.”
“Something needs to be done – and fast”
“The Government needs to find a solution to this – fast” added Lesh. “The simplest is to remove partial indexation and increase the total balance cap for everyone to $1.7m. This removes the complexity and is fairer than some of the other solutions. Why should the date a person commences a pension determine how much that pension should be? Clearly this is unfair”
“BGL needs to implement these changes in our market leading Simple Fund 360 SMSF admin software by 1 July 2021. Implementing partial indexation without access to ATO total balance cap data is going to result in many errors” noted Lesh. “Something needs to be done – and fast”.
BGL has over 6,000 clients representing over 200,000 SMSFs using it’s multi award winning Simple Fund 360 SMSF admin software. “It would be really nice if the government took into account the practical implementation issues of the legislation and made changes to help accountants who have already beared the brunt of the work around JobKeeper of the past 12 months” Lesh said.