Superannuation work test changes from 1 July 2020

The work test for voluntary concessional and non-concessional contributions will be pushed out to 67 and the age limit for spouse contributions lifted to 74 from 1 July 2020 after enabling regulations were registered late last week.

The Superannuation Legislation Amendment (2020 Measures No 1) Regulations 2020 amend the Superannuation Industry (Supervision) (SIS) Regulations to allow people aged 65 and 66 to make voluntary super contributions without meeting the work test, while also increasing the age limit for spouse contributions from the current level of 69.

The changes were first put forward by the government as part of the 2019 federal budget and then introduced into parliament in March of this year.

The amendments will establish a new age category of 65 to under 67.and that contributions from members in that age category can include mandated employer contributions or employer contributions, and member contributions or downsizer contributions.

Other changes will enable spouse contributions to be made for a member who is under 75 years of age and to enable spouse contributions for a recently retired member who is eligible for the one-year work test exemption, respectively.

 

Smarter SMSF chief executive Aaron Dunn noted the work test changes would probably also apply to the bring-forward rule, which would allow up to $300,000 to be added into a super fund, but this latter change had yet to be passed because unlike the work test and spouse contributions changes, it was part of an act and required the approval of parliament.

“It is important to note that any changes to regulations can simply be registered by the federal government, however, changes to the Income Tax Assessment Act 1997 requires these laws to be passed by both houses of parliament and become an act,” he said.

“This measure has been introduced into parliament through the Treasury Laws Amendment (More Flexible Superannuation) Bill 2020 on 13 May 2020. It would appear likely that this bill would be finalised during the June sitting days.”

0

Like This