Super legislation changes
I understand that there was draft legislation to raise the eligibility age for concessional contributions to super from 65 to 67 from 1 July 2020, without compliance with the Work Test.
This will be of interest to some non-working retirees turning 67 in the 2020-2021 financial year. Can you confirm whether this arrangement is now in place, or will be in place by 1 July? - Submitted by Robert
What you are referring to is not in place just yet but will be come 1 July. Over on our publication the Eureka Report, regular contributor and financial planner Lisa Papachristoforos wrote about the new legislation in her piece What could superannuation post COVID-19 look like? Scroll down to the subheading Contribution Age.
Here's an excerpt:
"This measure seeks to allow Australians more flexibility to contribute to superannuation after age 65 from July 1, 2020. A very general summary is that it:
- Allows those turning 66 and 67 to trigger the non-concessional contribution “bring forward” arrangements,
- Allows 65 and 66-year old’s to make or receive super contributions without meeting the 40 hours in a 30 day period work test, including making catch-up concessional contributions where eligible,
- Undertake recontribution strategies if eligible,
- Continue to use Small Business CGT Concessional contributions,
- Transfer foreign super into Australian superannuation accounts; and
- Allows those aged 70 to 74 to receive spouse contributions.
- The work test exempt contributions will operate exactly as it does now, except that becomes relevant after a member turns 67,
- There is no proposal to change the preservation rules,
- There will be no change to downsizer contributions; and
- There is no change to how the above interplays with the $1.6 total superannuation balance and transfer balance cap.
Moving the goal posts from 65 to 67 makes sense; it aligns superannuation legislation to pension age, which will reach age 67 from 1/7/2023. Yet it doesn’t take into consideration that many Australians are now faced with the prospect of working past the age of 67 in an attempt to grow their superannuation balances to their pre-COVID-19 levels."
Thank you for this question and I hope this helps.