Although the Coalition did not announce any major reforms to superannuation in this year’s federal Budget, it did pledge to help Australians aged over 60 save for retirement by extending the age limits for a number of existing contributions measures.

A returned Coalition government would give retirees an extra two years to make contributions without having to meet the “work test”. The test requires that a person aged 65 or over who wishes to make voluntary contributions is “gainfully employed” for at least 40 hours in any 30-day consecutive period during the financial year in which the contributions are made. The Coalition will extend this to age 67.

The Coalition will also give Australians an extra two years to make large contributions into super. The annual cap on non-concessional contributions (NCCs) is $100,000, but individuals aged under 65 at any point in a financial year may “bring forward” up to two additional years’ worth of NCCs (depending on the size of their total superannuation balance) to make a contribution of up to $300,000. The Coalition now wants to extend the scheme to anyone under 67 years, benefitting older Australians who wish to contribute a large amount from, say, proceeds from the sale of an asset.

But take care as you approach 67 as some timing traps may arise. This is due to the interaction of the bring-forward rules with the work test (and whether a separate and already legislated 12-month exemption from the work test that is set to apply from 1 July 2019 will be retained in future).

Further relaxing of age limits is also to apply to making a spouse contribution. If your spouse earns $37,000 or less, you may claim a maximum tax offset of $540 when you make a $3,000 contribution on their behalf during the income year. In welcome news, the age limit for receiving spouse contributions (contributions made by your spouse on your behalf directly to your super fund member account) is proposed to increase by 5 years from 69 to 74.With all the age limits and rules that apply, planning a contributions strategy for your 60s is essential. Talk to us today to start your planning. We’ll help you navigate any rule changes following the upcoming federal election to make sure you maximise the opportunities available to you.

CategorySMSF, Super
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