The Association of Independent Retirees (AIR) has endorsed the superannuation measures announced in last week’s federal budget, applauding the flexibility that has now been added to the retirement savings framework.
“The past year has been difficult for retirees partly or fully self-funding their own retirement, with next to zero interest rates on cash investments, lower company dividends and lower rental income. It is pleasing to see some superannuation reforms announced in the budget and the expectation of the economy continuing to recover from the coronavirus pandemic,” AIR president Wayne Strandquist said.
One particular initiative the consumer body praised was the amendment made to the work test.
On budget night, Treasurer Josh Frydenberg indicated from 1 July 2022, individuals aged 67 to 74 will no longer be required to meet the work test when making, or receiving, non-concessional superannuation contributions or salary-sacrificed contributions.
The measure also made this cohort eligible to take advantage of the non-concessional bring-forward provision as long as they satisfy the relevant total super balance threshold restrictions.
“Retirees welcome the measures in the federal budget to improve retirement savings for retirees and those approaching retirement,” Strandquist noted.
“The improved flexibility by removing the work test for non-concessional contributions to superannuation over age 65 will be of considerable assistance to retirees who were not able to accumulate sufficient superannuation while working.”
The AIR also applauded the government’s decision to broaden the access to the downsizer contribution provisions.
To this end, the government has made clear its intentions to drop the applicable age to make downsizer contributions from 65 to 60 from 1 July 2022.
“Lowering the age for downsizer contributions from 65 to 60 years will also assist empty nesters boost their superannuation as they prepare for retirement,” Strandquist pointed out.
