Just when you thought you had a grip on the superannuation rules, they change again. This time though, the changes are mostly positive, especially for older super members keen to top up their savings.
From July 1, changes came into effect allowing you to work longer and continue contributing to your superannuation.
Under changes to the work test, if you are aged 65 or 66 you can now put more money into superannuation even if you aren’t working. This gives people flexibility to make voluntary catch-up contributions for a few more years and give their retirement savings a last-minute boost.
Say you are 65 and inherit some money. You can now make a voluntary non-concessional contribution to your super account up to the annual limit of $100,000, even if you are not currently working enough hours to satisfy the work test. You could then withdraw the money or start a super pension.
Under the work test, which now kicks in at age 67, you must work at least 40 hours within 30 consecutive days in the financial year in which you make the contribution.
There are also plans to allow people aged 65 or 66 to use the existing bring forward rules. This allows you to ‘bring forward’ up to three years’ worth of non-concessional contributions, or up to $300,000 in the current financial year. However, that legislation is still pending.
If you would like more information about any of these changes or how to take advantage of them, give us a call.