The Federal Government has used its regulatory powers to give recent retirees an extra year to contribute to superannuation under the work test exemption rules.
The regulatory change has been announced by the Assistant Treasurer, Stuart Robert and came after the Parliament rose for the Christmas/New Year break with a raft of superannuation related legislation still sitting on the notice paper.
The work test exemption was announced in the 2018/19 Budget and the regulatory changes mean that from 1 July, next year, Australians aged 65 to 74 with a total superannuation balance below $300,000 will be able to make voluntary contributions for 12 months from the end of the financial year in which they last met the work test.
Under the arrangements, total superannuation balances will be assessed for eligibility at the beginning of the financial year following the year they last met the work test and that, once eligible, there will be no requirement for individuals to remain under the $300,000 balance cap for the duration of the 12 month period.
However, Robert noted that existing annual concessional contributions of $25,000 and $100,000 respectively would continue to apply to contributions made under the work test exemption albeit that individuals will also be able to access unused concessional cap space to contribute more than $25,000 under existing concessional cap carry forward rules during the 12 months.
Robert said that following feedback from stakeholders on the draft legislation, the Government had decided to allow those who used the work test exemption in the year they turned 65 to access bring forward arrangements for non-concessional contributions.
He said these individuals would be able to make up to $300,000 in contributions from after-tax income, providing extra flexibility to get their affairs in order as they prepare for retirement.