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Over 65? Great New Super Contribution Opportunities

From 1 July 2020, the Government has made some significant changes to Superannuation Legislation. These changes present opportunities for many people to contribute funds into Superannuation, that up until now, have been unable to do so.

Why contribute to super?

Superannuation is still the most tax effective retirement vehicle available to investors.

What are the changes?

No work test required for voluntary contributions by people aged 65 and 66:

The Government has updated the superannuation contribution rules allowing people aged 65 and 66 to make voluntary contributions to their super without meeting the work test.
Voluntary contributions include after-tax (non-concessional) contributions, tax-deductible (concessional) contributions, voluntary employer (salary sacrifice) contributions and spouse contributions.

What does this mean for me?

Previous rules meant you could only make voluntary superannuation contributions, if you had been gainfully employed for 40 hours over 30 consecutive days, during the financial year prior to the contribution being made.

With the Age Pension age scheduled to increase to 67 from 1 July 2023, this change effectively allows you to continue making voluntary super contributions until Age Pension age, whether you are still working or not.

Spouse contributions extended

Under the new laws, individuals can now contribute to their spouse’s superannuation, up until 28 days after the end of the month in which their spouse turns 75.

In addition, if the receiving spouse is age 65 or 66, they will no longer need to meet a work test or the work test exemption. If the receiving spouse is age 67 years or older the requirement to meet the work test or work test exemption will still apply.

What does this mean for me?

Previously, for you to make a spouse contribution, your spouse needed to be under age 70 at the time of the contribution and must have met the work test or work test exemption if they were age between 65 and 69.

This change enables you to potentially make spouse contributions for a further five years, giving you more opportunities to equalise your superannuation balances while potentially claiming a tax offset.

As always, we encourage you to contact our office on (07) 3252 9990, before actioning any of the above to ensure that it is a suitable strategy for you.

Source: Life Assets.