Changes to super contribution rules for over 65s

The Federal Government has updated superannuation laws to allow older Australians to contribute to their super for longer.

Work test to apply from age 67

The government has increased the age up to which super contributions can be made without having to meet a work test from 65 to 67.

The work test requires you to be in paid work for a minimum of 40 hours in any consecutive 30-day period in the financial year to make voluntary super contributions.

From 1 July 2020, the work test only applies for people aged between 67 and 74.

So, people aged 65 or 66 will now be allowed to make voluntary super contributions—both concessional and non-concessional—regardless of whether they are working or not. The usual contribution caps will continue to apply.

AMP Technical Strategy Manager John Perri says, “This change recognises that many of us may have to work longer to have adequate savings for our retirement.

“Extending the work test age to 67 will allow more individuals aged 65 and 66 to top up their super without having to meet the work test, if they are financially capable of doing so. For some this is important after the impacts of COVID-19 on incomes and investments.”

Increased age limit for spouse contributions

The government has increased the cut-off age for spouse super contributions from 69 to 74, from 1 July 2020. So, a receiving spouse can build their super for longer, assuming they continue to meet the work test from age 67.

Any contributions received by a spouse will count towards their ‘non-concessional’ after-tax contribution limit.

Work test exemption continues to apply

The ‘work test exemption’ for recent retirees will continue to apply for people aged 67 to 74.

This allows people with a total super balance below $300,000 on 30 June of the previous financial year to make voluntary super contributions for 12 months from the end of the financial year in which they last met the work test. It can only be applied once.

For spouse contributions the work test exemption applies to the receiving spouse.

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