As part of the 2019-20 Budget and as previously discussed here, the Australian Government announced that Australians over age 65 would have greater flexibility in making voluntary concessional and non-concessional superannuation contributions from 1 July 2020.

This greater flexibility is to be achieved through three main changes to the contribution rules:

The age at which the work test starts to apply for voluntary concessional and non-concessional contributions is to be increased from 65 to 67;
The cut-off age for spouse contributions is to be increased from 70 to 75; and
Individuals age 65 and 66 will be able to make up to three years of non-concessional superannuation contributions under the bring forward rule.

The Treasury Laws Amendment (More Flexible Superannuation) Bill 2020 has now been introduced to Parliament, which introduces the proposed change to the bring forward rule mentioned at point 3 above.

The remaining changes (being the increase in age at which the work test applies and the cut-off age for spouse contributions) are to be implemented via amendments to the Superannuation Industry (Supervision) Regulations 1994.

Currently, the ‘work test’ requires that, for those age 65 – 74, they must work at least 40 hours during a consecutive 30-day period each financial year for their super fund to accept a personal super contribution (subject to limited exceptions).

The above amendment (if passed) will mean that individuals aged less than 67 will be able to make non-concessional and concessional (deductible) contributions to superannuation regardless of whether they satisfy the work test.

The proposed date of effect of the above amendments is 1 July 2020.

Phil Broderick
Principal
T +61 3 9611 0163 l M +61 419 512 801
E pbroderick@sladen.com.au

Philippa Briglia
Senior Associate
T +61 3 9611 0173
E pbriglia@sladen.com.au