Last night’s Federal Budget focused on tax cuts and only contained a few proposals relevant to superannuation.
The two that were of interest to superannuation fund members are outlined below. They are part of the Government’s bid to court older voters and would be due to take effect from 2020-21.
Contribution restrictions lifted on 65 and 66-year olds
Under proposed new laws announced in last night’s Federal budget, Australians aged 65 and 66 will be able to make voluntary super contributions without meeting the current work test. 65 and 66-year-olds would be able to make voluntary superannuation contributions without being required to work at least 40 hours in every 30 days to be eligible to contribute.
They would also be permitted to make three years’ worth of non-concessional (after tax) contributions to their super accounts per year, which are currently capped at $100,000 a year. At the moment, only people under 65 (or who have turned 65 in the financial year) may be able to access those arrangements.
Increased access to spouse contributions
The Government also intends to increase the age limit for spouse contributions from 69 to 74. At the moment, people aged over 70 can’t receive contributions made by someone else on their behalf. However, they will still need to meet the work test if aged over 66.
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