The Government has released draft legislation which it says will make superannuation more flexible for older Australians, by changing the work test, bring-forward rule, and spouse contributions.
Under the proposed changes, released for consultation, people aged 65 and 66 won’t need to meet the ‘work test’ to make voluntary super contributions. Also, the non-concessional contribution bring-forward rules would be extended to people aged 65 and 66, and the maximum age for spouse contributions increased from 69 to 74.
“This draft legislation reflects the Morrison Government’s ongoing commitment to ensuring all Australians have additional flexibility in how they save as they transition to retirement,” said Assistant Minister for Superannuation, Financial Services and Financial Technology Jane Hume.
“The Coalition understands the realities of the modern workplace. Work patterns have evolved, and more women are rejoining the workforce than ever before. Our superannuation system needs the flexibility to match.”
These changes were announced in the 2019/20 Budget. But they won’t be legislated before the next Budget, as there are no Parliamentary sitting days between the end of the consultation period and 12 May – Budget day.
The Work Test change was also an election promise – it was included in the Liberal Party’s “Our Plan to Support Retirees”. However, another Liberal party election promises – increasing the SMSF member cap from four to six – has yet to be legislated, though it apparently remains policy.
It is proposed that the changes, if legislated, will start for the 2020/21 financial year.
The consultation period on the draft legislation closes on 3 April 2020.