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Older Australians will be able to make voluntary super contributions without meeting the current work test under proposed new laws announced in the Budget.
From 1 July 2020, Australians aged 65 and 66 years old will be able to make voluntary superannuation contributions, without meeting the current work test requirement of at least 40 hours worked per 30 days to contribute.
If eligible, the same group will also be permitted to make three years’ worth of non-concessional (after tax) contributions to their super accounts per year, which are currently capped at $100,000 a year. At the moment, only people under 65 (or who have turned 65 in the financial year) can access those arrangements.
The Government also intends to increase the age limit for spouse contributions from 69 to 74. Currently, people aged over 70 can’t receive contributions made by someone else on their behalf. However, they will still need to meet the work test if aged over 66.
These proposals are due to take effect from 1 July 2020 and would benefit about 55,000 people.
Treasurer Josh Frydenberg says the changes will help Australians boost their retirement savings by giving them greater flexibility as they near retirement.
Will Burkitt, a Post-Retirement Innovation Leader within the superannuation industry, says the proposed changes are positive but short term focussed.
“They will provide additional opportunities for Australians to boost their retirement savings, and increasing the age limit for spouse contributions allows households to more equitably balance their retirement assets,” Burkitt says. “The measures are however tactical and incremental, rather than structural and long term.” |
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