The SMSF Association has warned against implementing any non-concessional contribution bring forward strategies, for individuals aged 65 and 66 with a total super balance of less than $1.5 million, in anticipation of the legislation allowing this cohort to participate in these strategies being passed in the future.
“The law when it does get passed will apply from 1 July 2020 but we must stress that individuals should not assume this bill will pass,” SMSF Association policy manager Franco Morelli said during the industry body’s latest regulation and legislation update webinar.
“Despite it being back dated I would not encourage anyone to utilise this bring forward strategy until the law is passed,” he added.
Morelli anticipates the legislation will be passed in August when the next sitting of parliament is scheduled to sit but said the date on which the legal amendment will take effect could be pushed out due to the current delay.
“From our understanding [the new rules] will have a 1 October start date so [during the] next quarter,” he said.
“We will get confirmation on when that strategy can be put in place but we must [acknowledge] the bill hasn’t passed, and you should not assume that it will, so the bring forward rule does not apply from 1 July 2020 yet.”
The bill containing the amendment to the non-concessional contribution bring forward rules had been scheduled to be addressed by parliament along with some of the other superannuation changes announced in the 2018/19 federal budget.
These changes would exempt individuals aged 65 and 66 from having to satisfy the work test prior to making either concessional or non-concessional contributions to their retirement savings vehicles.
While the other measures, which included amendment to enable spouse contributions to be made in respect of a member who is under 75 years of age, were passed unfortunately the bill affecting the non-concessional contribution bring forward rules did not proceed to a vote.