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.
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