The Government has again announced superannuation changes in this year’s Budget, which are aimed at increasing contribution opportunities for individuals aged between the ages of 65 and 74.
Work Test Exemption for Individuals Aged 65 and 66
The Government has stated that from 1 July 2020, individuals aged 65 and 66 will be permitted to make voluntary superannuation contributions without satisfying the work-test requirement. Currently, contributions by those aged 65 and over are subject to a work-test that requires the person to have worked a minimum of 40 hours in a consecutive 30-day period during the financial year.
In addition to the work-test exemption, the Government has stated it would also permit ‘bring-forward’ contributions for individuals aged 65 and 66. The ability to bring forward contributions is not currently available once an individual has reached age 65. On a practical level, the measure would extend access to bring-forward contributions for an additional two years of an individual’s life. Bring-forward contributions allow individuals to use three years of non-concessional contributions in any one year – i.e. non-concessional contributions of up to $300,000 could be made in one financial year, significantly boosting superannuation fund assets available for investment.