News

Pensions, Superannuation

Contributions measure raises other system questions

The federal budget measure that scrapped the work test for individuals aged 65 and 66 wanting to make contributions raises questions as to whether other parameters of the superannuation system will require changing, a technical expert has said.

The initiative has been widely recognised as a move designed to align the work test requirements in line with the age pension system, however, SuperConcepts SMSF technical and private wealth executive manager Graeme Colley pointed out it may have resulted in misalignment with other superannuation rules.

“One thing we were wondering with this measure is how it’s going to work with the existing conditions of release,” Colley told selfmanagedsuper.

“Preservation age is 65 at the moment, so does this measure mean it will increase to 67 in the future?”

Further, he identified an anomaly with the budget item increasing the age limit for spouse contributions from 69 to 74.

“The spouse contributions measure is interesting from the point of view that I can put contributions in for my spouse, although your spouse may not work up to the age of 74, but I can’t put contributions in for myself,” he noted.

“It means I can gift money to my spouse and she can put the money into the fund for me, so should I then do the same for them?”

Copyright © SMS Magazine 2019

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital