Work test and spouse contribution changes to increase retirement savings
The age increase for the work test from 65 to 67 and the age limit for spouse contributions from 69 to 74 needs to be incorporated into end-of-year planning as the changes will take effect on 1 July, 2020, according to the SMSF Association.
The association’s chief executive, John Maroney said it was imperative that self-managed superannuation fund (SMSF) specialist advisers and trustees were alert to these amendments and needed to incorporate them into their end-of-year planning.
“These changes, which apply to contributions made from the 2020-21 financial year, are extremely timely considering the market and economic fallout from the COVID-19 pandemic,” Maroney said.
“The amendments will give more flexibility to older individuals wanting to increase their contributions to superannuation to build adequate retirement savings.
“The work test has long been an area of regulatory burden and increasing the age at which it applies will reduce red tape and compliance obligations for these individuals.”
The SMSF Association noted that increasing the age limit for accessing the bring forward non-concessional contributions cap for people aged 65 and 66 was expected to be passed before 1 July when Parliament sat this month.
Recommended for you
Financial Services Council chief executive, Blake Briggs, is urging Minister for Financial Services, Stephen Jones, to take advantage of the QAR opportunity to reduce regulatory duplication and ensure advice is affordable.
Former chair of the House of Representatives’ Standing Economics Committee, Tim Wilson, is planning a return to politics after losing his seat in the 2022 federal election.
Morningstar is going to offer research ratings of funds in the $3.5 trillion superannuation sector for the first time in response to demand from financial advisers.
Treasurer Jim Chalmers has opened a consultation into the design of the annual superannuation performance test, canvassing views on a range of reform options.
