With the election just around the corner, a few changes to superannuation were announced in the 2019-20 Federal Budget. We have taken a look at what this year’s Federal Budget might mean for you and your superannuation.

These Budget announcements are all proposals and require legislation to be passed in order to come into effect. We will keep you updated after the election to break down what the result means for your superannuation.

 

Extending the ‘bring-forward rule’

The ‘bring-forward rule’ currently allows members under the age of 65 to bring forward their non-concessional contributions caps from up to three-years into the future and use them over a shorter period.

What is the proposed change?

The Budget announced the bring-forward rule would be extended to those aged 65 and 66, effective from 1 July 2020.

What does this mean?

The annual non-concessional contributions cap is $100,000. This change will allow members under the age of 67 to make non-concessional contributions of up to three times the annual contributions cap in a single year i.e. $300,000.

 

Changes to the Work Test

The Work Test states that members aged 65 to 74 must be working for a minimum of 40 hours in any 30-day period should they wish to make voluntary contributions to their super account.

What is the proposed change?

The Budget announced the Work Test will be deferred to age 67, effective from 1 July 2020.

What does this mean?

Members aged 65 and 66 will be able to make voluntary concessional (before-tax) and non-concessional (after tax) contributions without having to meet the Work Test.

 

Changes to spouse contributions

Members married or in a de-facto relationship are able to provide super contributions to their spouse if they are under the age of 70.

What is the proposed change?

The Budget proposed to increase the age limit for spouse contributions to age 74, effective from 1 July 2020.

What does this mean?

Members married or in a de-facto relationship will be able to provide super contributions to their spouse if they are under the age of 75.

 

This budget update was prepared for Super SA by our investment managers, Funds SA.