On 13 May 2020, the Government introduced legislation to increase the age at which contributions can be made to superannuation:
These measures were originally announced in the 2019/20 Federal Budget with a proposed start date of 1 July 2020 and are contained in:
The work test will no longer need to be met to make voluntary contributions to superannuation from 1 July 2020 for those aged 65 and 66. This means the work test requirements will align with Age Pension age, which will reach age 67 from 1 July 2023.
The ability to utilise the bring-forward rule will also be amended to allow individuals less than age 67 (on 1 July of a financial year) to contribute a greater amount to superannuation.
There is no change to other criteria, such as the total superannuation balance, which limits the ability to make non-concessional contributions.
The removal of the work test would provide the opportunity for eligible clients to:
The age limit for spouse contributions will increase to 74. Currently, spouse contributions can only be made if the receiving spouse is under age 70 and meets the work test if aged 65 to 69. Additional flexibility will be provided by the removal of the work test for those aged 65 and 66.
This would enable spouse contributions to be made for the receiving spouse without the need to satisfy the work test up to age 67. From age 67 to 74, the work test would need to be satisfied by the receiving spouse.
Making spouse contributions is a simple strategy that enables a spouse’s superannuation to be boosted. This may be used as a means of equalising the superannuation interests of both members of the couple. It may also entitle the contributing spouse to access to the spouse contribution tax offset.
Other criteria for spouse contributions also remains unchanged, such as the total superannuation balance.
To find out more about how any of these measures may be of assistance in your individual circumstances, please contact Gordon Thoms or David Conte at Calibre Private Wealth Advisers on ph. (03) 9824 2777 or email us here.
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