Superannuation contribution flexibility for older Australians
Superannuation contribution measures seek to enable older individuals to make various voluntary superannuation contributions without having to meet some of the current strict prerequisites.
The current rules provide that anyone aged over 65 can’t make a voluntary personal superannuation contribution unless they satisfy the work test - that is, they must have worked a minimum of 40 hours over a 30-day period in the year. Currently, it’s also the case that anyone over the age of 70 can’t receive a contribution made by someone else on their behalf, such as a spouse contribution. And the existing rules also prohibit anyone over age 65 from making the equivalent of up to three years of the annual non-concessional contribution cap at any time in a three-year period. There’s also uncertainty about the way that superannuation funds calculate their tax-free income and they are obliged to obtain an actuarial certificate in certain circumstances.
The changes announced in this Budget will allow:
- People aged 65 and 66 to make a voluntary contribution in respect of themselves without having to satisfy the work test
- Spouse contributions in respect of anyone up to age 74
- The three-year non-concessional contribution cap bring-forward strategy to be used by those aged 65 and 66.
The measures will also relax the obligation for superannuation funds to obtain an actuarial certificate.
These measures will have an obvious positive impact on older individuals who want to make additional superannuation contributions, perhaps at a time of life when they can afford it. They broadly align with the eventual extension of the eligibility age for the Age Pension to 67, and also reflect the consequences of an ageing society. Individuals and their advisers should contemplate the ability to avail themselves of making additional contributions into the tax-concessional superannuation environment in appropriate circumstances, when and if these proposals become law.