The Government will provide a one-year exemption from the work test for super contributions to allow recent retirees to boost their balances.
Currently, people aged 65 to 74 must work a minimum of 40 hours in any 30-day period in a financial year in order to keep making contributions to superannuation. This is known as the work test.
From 1 July 2019, 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.
Total superannuation balances will be assessed for eligibility at the start of the financial year following the year in which they last met the work test.
Once eligible, there is no requirement for individuals to remain under the $300,000 balance cap for the duration of the 12-month period.
Existing annual concessional and non-concessional caps ($25,000 and $100,000 respectively) will continue to apply to contributions made under the work test exemption.
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.
As bring-forward arrangements for non-concessional contributions are not available to those aged 65 and over, individuals will not be able to access bring-forward non-concessional contributions under the work test exemption.
The work test exemption aims to give older Australians additional flexibility to contribute more into superannuation as they move into retirement.
Can you see value in the relaxation of the super work test? Will this help boost your super balance?