News

Retirement, Superannuation

Govt dilutes Work Test and extends bring-forward rule

Ahead of tomorrow’s Federal Budget, the Government has announced changes to super pitched at new retirees.

The Government has announced it will remove the Work Test for people aged 65 and 66 from 1 July 2020 and extend access to the bring-forward arrangements for non-concessional contributions for the same group.

In an announcement released a day before the Federal Budget, Treasurer Josh Frydenberg also stated the current Government would increase the age limit for spouse contributions from 69 to 74 years.

According to a statement released by Frydenberg, under the Work Test change people aged 65 and 66 will be able to make concessional and non-concessional voluntary superannuation contributions without meeting the test from the middle of next year.

Frydenberg said the change to the Work Test would align it with the eligibility age for the Age Pension, which is scheduled to reach 67 from 1 July 2023, and that around 55,000 people aged 65 and 66 would benefit from the change in 2020-21.

The Treasurer also said the bring-forward arrangements would be extended from those aged less than 65 years to those aged 65 and 66, allowing the latter to make three years’ worth of non-concessional contributions, capped at $100,000 a year, to their super in a single year.

“The Government can deliver these reforms because our responsible budget management allows us to guarantee the essential services that Australians rely on,” Frydenberg said in the statement, which also referenced new laws to scrap exit fees and to reunite super fund members with low balance or inactive accounts.

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