The Government’s commitment to increase the age when the work test starts to apply from 65 to 67 and the age limit for spouse contributions from 69 to 74 before 1 July 2020 has the full backing of the SMSF Association.
The amendments to the SIS Regulations give effect to the first two elements of the 2019-20 Budget reform package, Superannuation – improving flexibility for older Australians. They have been registered and take effect 1 July 2020.
SMSF Association CEO John Maroney says: “These changes, which apply to contributions made from the 2020-21 financial year, are extremely timely considering the market and economic fallout from the COVID-19 pandemic.
“It’s imperative that SMSF specialist advisers and trustees are alert to these amendments and incorporate them in their end-of-year planning.
“The amendments will give more flexibility to older individuals wanting to increase their contributions to superannuation to build adequate retirement savings.
“The work test has long been an area of regulatory burden and increasing the age at which it applies will reduce red tape and compliance obligations for these individuals.”
The third element of the budget measure – increasing the age limit for accessing the bring forward non-concessional contributions cap for people aged 65 and 66 – will be implemented through amendments to the Income Tax Assessment Act 1997.
These amendments are before the House of Representatives and are expected to be passed before 1 July when Parliament sits this month.