Bring-forward NCCs now less relevant

bring-forward NCC

The elimination of the work test has potentially impacted the relevance of the bring-forward non-concessional contribution provisions.

The federal government’s decision to allow Australians to make non-concessional contributions to their superannuation funds up to age 74 without the requirement to satisfy a work test has potentially neutralised the importance of the three-year bring-forward rule, an SMSF specialist has said.

“The announcement that there is no more work test and that this measure will allow people to use the bring-forward contributions provisions got me thinking whether individuals actually need to use the bring-forward provisions if there is no work test in the next couple of years,” SuperGuardian education manager Tim Miller told selfmanagedsuper.

Miller added the decision, announced in last night’s budget, also creates doubt over the current pending legislation regarding the age thresholds associated with bring-forward non-concessional contributions.

“With regard to the work test amendments that we are waiting for, are we going to still see them only available until age 67, because these amendments are now almost a moot point.”

According to Miller, there was another anomaly evident in the measure with regard to another type of contributions.

The budget papers stipulated access to concessional personal deductible contributions for individuals aged 67 to 74 will still be subject to meeting the work test.

“The government said it has simplified the process with regard to salary sacrifice and non-concessional contributions, but you still have to meet the work test to make personal deductible contributions,” Miller pointed out.

“I found that to be intriguing because I would’ve thought you’d just need to have assessable income to be able to make personal deductible contributions.

“So this measure is a nicety, but I think the way it has been introduced potentially has complexities with personal deductible contributions and I think we’ll have to wait to see how it pans out.”

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