Superannuation Contributions Work Test Regulations Relaxed
Until recently, once you reached age 65, you could no longer contribute to superannuation unless you satisfied the “work test” (with a few exceptions).
In the 2019 Budget, the Government announced its intention to
Extend the age limit to 67, in line with the new eligibility age for the Age Pension from 1 July 2023.
Increase the cut-off age for spouse contribution from age 70 to 75
The enabling regulations have been passed, allowing such voluntary contributions from 1 July 2020.
The Government’s proposal included allowing people aged 65 and 66 to use the “bring forward” rule to contribute up to $300,000 in non-concessional contributions. However, this was not yet been passed by the Senate.
This change means that people aged 65 or 66, who don’t meet the work test, will still be allowed to make voluntary super contributions (both CCs and NCCs) – with the usual contribution caps continuing to apply.
For those aged 67 to 74, the existing work test exemption applies, that is:
There is a one-off opportunity for those with a total super balance below $300,000 on 30 June of the prior financial year, to make voluntary super contributions for 12 months from the end of the financial year in which they last met the work test
For spouse contributions (where the contributing spouse can receive a tax rebate of up to $540 by contributing $3,000), the receiving spouse must satisfy the work test if age 67 or over, except where the “recent retiree” exemption applies.
Contact us for further information and to see if this may be appropriate in your personal situation.
*Accuracy as at the date of publication.