There was a point in time earlier this year due to the coronavirus pandemic, that the proposed changes from 1 July 2020 to increase the age limit to make contributions would not take effect as intended.
However, we have now seen Superannuation Legislation Amendment (2020 Measures No. 1) Regulations 2020 registered, in which makes amendments within the SIS Regulations to increase the age at which the work test starts to apply for voluntary concessional and non-concessional superannuation contributions from 65 to 67, and to increase the age limit for spouse contributions from 69 to 74.
The amendments to the SIS Regulations are as follows:
|Subregulation 7.04(1) establishes a new age category of 65 to under 67 and specifies the types of contributions that can be made by a member in that age category:
|Subparagraph (b)(ii), in Subregulation 7.04(1) is amended to enable spouse contributions to be made in respect of a member who is under 75 years of age.|
|Subparagraph (d)(ii), in Subregulation 7.04(1) is amended to enable spouse contributions in respect of a recently retired member who is eligible for the one-year work test exemption|
What about the bring forward rule?
As part of the changes in increasing the contribution rules to age 67, it is proposed that these measures will also extend to the bring-forward rule, allowing for a person with a Total Super Balance (TSB) at the end of the prior of:
- less than $1,500,000 to apply a 2 year bring forward amount ($200,000); or
- less than $1,400,000 to apply a 3 year bring forward amount ($300,000).
It is important to note that any changes to regulations can simply be registered by the Federal Government, however changes to the Income Tax Assessment Act (ITAA) 1997 requires these laws to be passed by both Houses of Parliament and become an Act. This measure has been introduced into Parliament through the Treasury Laws Amendment (More Flexible Superannuation) Bill 2020 on 13 May 2020. It would appear likely that this Bill would be finalised during the June sitting days. ** UPDATE: This Bill was not finalised in Parliament before 30 June 2020 and currently remains outstanding. Therefore the bring-forward rule does not currently apply for a 65 & 66 year from 1 July 2020 at this time **
These changes open up a range of opportunities, including what I’m calling the ‘opportunity zone’ between 65 and 67 years of age.