The SMSF Association has revealed it has received notification from Treasury as to how the non-concessional contributions (NCC) three-year bring-forward provisions will apply for individuals aged between 67 and 74.
“Treasury has confirmed that the amendments, which are currently before parliament, simply move the current cut-off age for the bring-forward rule from needing to be under age 67 to needing to be under age 75 from 1 July 2022,” the association posted on social media yesterday.
“Importantly, Treasury has confirmed the regulations which will support the amendments currently before parliament, and which Treasury are hoping will be finalised before the end of this calendar year, will not change this outcome.”
The industry body welcomed the news, acknowledging Treasury’s approach will not add any unwanted additional complexity to the superannuation system.
The original budget papers regarding the measure did not make it clear how the rules would be applied to the additional cohort given access to the contribution strategy. However, there were indications a phased approach to the provision based on age would be adopted.
“The feedback that was received [from Treasury] is [the rule will probably be applied such that] depending on an individual’s age we will see a phasing out of the [NCC] bring-forward [provision] subject of course to the normal contributions rules – those TSB (total super balance) tests that determine whether or not someone qualifies,” SMSF Association policy manager Tracey Scotchbrook said at the ASF Audits Technical Seminar 2021 in October.
Specifically, Scotchbrook noted the phasing-out method will likely see people aged 72 and under able to bring forward three years of NCCs, people aged 72 and up to when they turn 74 allowed to bring forward two years of NCCs, and those aged 74 but under age 75 able to bring forward one year of NCCs.
The decision to broaden the application of the NCC bring-forward provisions was announced along with the amendment to the current work test rules in the 2021 federal budget.