The federal government has introduced draft legislation to enact its 2019 ‘work test’ budget announcement allowing individuals aged 65 and over greater ability to make superannuation contributions.
The draft legislation is designed to amend two existing pieces of the retirement savings legislative framework, the first being the Superannuation Industry (Supervision) Regulations 1994.
These regulations will be altered to allow individuals aged 65 and 66 to make personal contributions to their superannuation fund without having to satisfy the work test.
Currently, any person between the ages of 65 and 74 must work a minimum of 40 hours over a period of 30 days in any give financial year before they are eligible to make voluntary superannuation contributions.
The amendment will also raise the maximum age from 69 to 74 for people able to receive spousal contributions.
The Income Tax Assessment Act 1997 will also be altered by this piece of draft legislation.
Specifically, this change will allow people aged 65 and 66 the ability to use the three-year bring-forward non-concessional contributions provisions.
Currently, only individuals under the age of 65 can take advantage of the bring-forward non-concessional contributions arrangements.
“This draft legislation reflects the Morrison government’s ongoing commitment to ensuring all Australians have additional flexibility in how they save as they transition to retirement,” Assistant Minister for Superannuation, Financial Services and Financial Technology Jane Hume said.
“The coalition understands the realities of the modern workplace. Work patterns have evolved and more women are rejoining the workforce than ever before. Our superannuation system needs the flexibility to match,” Hume added.
Feedback pertaining to the draft legislation can be submitted to the government, with the consultation period closing on 3 April.
The draft legislation, regulations and supporting material for the measure, Superannuation – improving flexibility for older Australians, can be accessed via the Treasury website.
Speculation as to how this budget announcement would be implemented by law has been a talking point in the SMSF sector, with a recent suggestion Canberra’s approach will be to target certain cohorts.