The Federal Government has updated superannuation laws to allow older Australians to contribute to their super for longer.
Work test to apply from age 67
The government has increased the age up to which super contributions can be made without having to meet a work test from 65 to 67.
The work test requires you to be in paid work for a minimum of 40 hours in any consecutive 30-day period in the financial year to make voluntary super contributions.
From 1 July 2020, the work test only applies for people aged between 67 and 74.
So, people aged 65 or 66 will now be allowed to make voluntary super contributions—both concessional and non-concessional—regardless of whether they are working or not. The usual contribution caps will continue to apply.
AMP Technical Strategy Manager John Perri says, “This change recognises that many of us may have to work longer to have adequate savings for our retirement.
“Extending the work test age to 67 will allow more individuals aged 65 and 66 to top up their super without having to meet the work test, if they are financially capable of doing so. For some this is important after the impacts of COVID-19 on incomes and investments.”
Increased age limit for spouse contributions
The government has increased the cut-off age for spouse super contributions from 69 to 74, from 1 July 2020. So, a receiving spouse can build their super for longer, assuming they continue to meet the work test from age 67.
Any contributions received by a spouse will count towards their ‘non-concessional’ after-tax contribution limit.
Work test exemption continues to apply
The ‘work test exemption’ for recent retirees will continue to apply for people aged 67 to 74.
This allows people with a total super balance below $300,000 on 30 June of the previous financial year to make voluntary super contributions for 12 months from the end of the financial year in which they last met the work test. It can only be applied once.
For spouse contributions the work test exemption applies to the receiving spouse.
Please contact us on 1300 882 166 if you seek further assistance on this topic
Important: This information is provided by AMP Life Limited. It is general information only and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances and the relevant Product Disclosure Statement or Terms and Conditions, available by calling 1300 882 166, before deciding what’s right for you. All information in this article is subject to change without notice. Although the information is from sources considered reliable, AMP and our company do not guarantee that it is accurate or complete. You should not rely upon it and should seek professional advice before making any financial decision. Except where liability under any statute cannot be excluded, AMP and our company do not accept any liability for any resulting loss or damage of the reader or any other person. Any links have been provided for information purposes only and will take you to external websites. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.