Superannuation contribution changes for those nearing retirement


Government Proposal

The Morrison Government is taking action to help Australians boost their retirement savings by giving them greater flexibility as they near their retirement years. 

In a pre-budget announcement, the Treasurer, Josh Freydenberg has announced a number of proposed changes to superannuation contribution rules;

  1. From 1 July 2020 Individuals who are 65 to 66 will be able to contribute to their Superannuation without needing passing the 40 Hours in 30 days work test in the year of contribution. It has already been proposed that individuals over age 65, who have passed the work test in the previous financial year, would be able to contribute so this would seem to be a modification to that announcement. This will align the Work Test with the eligibility age for the Age Pension, which is scheduled to reach 67 from 1 July 2023. 
  2. The previous announcement will still be useful for those who retire aged 67-73.
  3. The spouse contribution age limit will be extended from 69 to 74. This allows a person to contribute up to $3000 to their spouse’s Superannuation and receive a tax offset of up to $540. Currently, those aged 70 years and over cannot receive contributions made by another person on their behalf.
  4. The 3 year non-concessional bring forward age limit will be extended from age 65 to 66. This could allow those who turned 65 and extra year of tax planning to put up to $300,000 in to their Superannuation. Valuable measure if you want to retire at 65 but not sell a CGT asset until the new tax year.

These are still proposals and nothing that the treasurer has proposed will proceed unless there is Opposition support or the current government pull off a surprise election win.   

If they do get passed I will write up some strategies especially for those looking to sell assets to boost super near retirement.

Liam Shorte

@SMSFCoach

Leave a comment

1 Comment

  1. Anne-Louise comerford

     /  April 2, 2019

    Thanks Liam. Looking forward to your take on the budget tonight. Anne-Louise

    Like

    Reply

Let us know what you think? Have you got a question based on the article? Let me know

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: