The proposal has been welcomed by key industry stakeholders, including the Tax Institute, which lauded the reforms in its pre-budget submission to Treasury.

“This will provide trustees with greater certainty that their superannuation balances will not be unfairly impacted by circumstances outside of their control,” the Tax Institute noted.

However, the Albanese government is yet to formally introduce legislation to parliament or open consultation for industry stakeholders.

“We consider that the government should promptly introduce enabling legislation,” the Tax Institute added.

“This will enable individuals to contribute to their superannuation in a wider range of circumstances, mitigate against adverse outcomes in the event that trustees may be required to be outside of Australia beyond the two years, such as during the COVID-19 pandemic, and support the policy objective of self-sufficient retirement.”

The Tax Institute’s calls were echoed by the SMSFA in its own submission to Treasury, adding the government should also move to implement the previously-announced two-year amnesty for legacy pensions conversions.

“It is acknowledged that these announcements were made by the former government,” the association noted.

“We therefore thank the government for the October 2022 Budget announcement which confirmed that the reform of the residency rules has been incorporated into the government’s policy agenda.

“Both of these measures are important reforms for the SMSF sector, and we ask the government and Treasury to undertake the necessary industry consultation and progress the required legislation as a matter of priority.”

These were among a raft of proposed superannuation reforms announced by the government since it assumed office in mid-2022.

This included a push to legislate a definition of superannuation, which the government has claimed would “protect” the system and “safeguard” retirement savings.

Treasury launched a consultation process for industry feedback, which closed on 31 March.

The Albanese government has also announced plans to double the concessional tax rate for superannuation balances exceeding $3 million, from 15 per cent to 20 per cent.

The proposed changes, which would take effect on 1 July 2025, would not be retrospective, applying only to future earnings.

The higher concessional tax rate is tipped to contribute $900 million to the bottom line over the forward estimates and approximately $2 billion in the first full year of revenue after the election.

This assumes the reforms would impact 0.5 per cent of superannuation accounts, or roughly 80,000 Australians.

However, the SMSFA slammed the measure, particularly the proposed tax calculation model, which proposes to use movements in a total superannuation balance (TSB) to assess taxable income.

The model was described as “unjust”, with the SMSFA stating it would not generate a “true, fair, or equitable” reflection of a member’s tax obligations.

The SMSFA also fears the proposed model could tax members twice, with the current calculation including tax refunds invested in the fund.

In light of these concerns, the SMSF Association has recommended the formal consultation process be undertaken ahead of the publication of exposure draft legislation for the proposed reforms.