Superannuation bill finally passes to allow for greater flexibility to superannuation contributions

The government have finally passed legislation to extend the age limits from 65 to 67 to access the ‘bring forward rule’ for non-concessional superannuation contributions.

This means that those age 66 and under can make a non-concessional superannuation contribution of $300,000 (3 times the annual cap of $100,000). Prior to 1 July 2020 members under 65 only had access to these measures and those age between 65 and 67 had to satisfy the work test requirements before making any contributions. Please be careful though as there are restrictions when contributing to superannuation particularly if your total super balance is more than $1.4 million as applying the bring forward rule may result in excess contributions tax.

Other measures in the Treasury Laws Amendment (More Flexibility Superannuation) Bill 2020 provide an increase in the age to 67 to make voluntary concessional and non-concessional contributions without satisfying the work test. To meet the work test, you must be gainfully employed for at least 40 hours during a consecutive 30-day period in the financial year in which the contributions are made. A work test exemption can apply for individuals one year after retirement, but only after satisfying certain conditions.

Also included in the bill were measures to increase the cut-off age for spouse contributions from age 70 to 75. This measure allows individuals to receive an offset of up to $540 for contributions to a spouse with a low income.

The rules governing superannuation regime is complex, so it is important speak with our Plant and Associates team before making any contributions.