The federal government will allow people entering into retirement to make up to $300,000 in non-concessional contributions as a result of a change to the work test exemption.
The change was announced at the SMSF Association National Conference 2019 in Melbourne last Friday by Assistant Treasurer Stuart Robert, who said the move was a result of feedback from stakeholders during a recent public consultation on regulations related to the work test exemption.
The one-year exemption from the work test for superannuation contributions was introduced in the 2018 budget and allowed people aged 65 to 73 with a superannuation balance below $300,000 to make voluntary contributions for 12 months from the end of the financial year in which they last met the work test.
Under the change, Robert said “the government has decided to allow those who use the work test exemption in the year they turn 65 to access bring-forward arrangements for non-concessional contributions”.
“These individuals will be able to make up to $300,000 in contributions from after-tax income, providing extra flexibility to get their affairs in order as they prepare for retirement,” he said.
“This change will also align the contribution rules for the work test exemption with those that apply under the work test, making the system simple to understand for members.”
He repeated the government’s support for the SMSF sector, saying “the government doesn’t just value SMSFs – we back you as well. I want to see your sector grow and thrive”.
Robert also criticised the scrapping of franking credit refunds for certain individuals proposed by the Labor Party, claiming 200,000 SMSFs, with 365,000 member accounts, would lose refunded franking credits as a result of the policy.
“This is a great attack on those who are saving to be self-reliant in retirement. On Labor’s own numbers it rips $55 billion off Australians and their superannuation funds over 10 years,” he said.