This year’s Budget released by Treasurer Josh Frydenberg on Tuesday 2 April 2019 has proposed several changes to the super system, mostly focusing on the contribution rules.
Super contribution rule changes
From 1 July 2020, the superannuation work test will no longer apply if you are aged 65 or 66. This change will allow members to make and receive concessional and non-concessional contributions without having to meet the work test requirements.
If you are aged 65 or 66 you will be able to access the bring-forward option on non-concessional contributions allowing you to make up to three years’ worth of contributions. This change will align the work test requirements with the Age Pension eligibility requirements, with the Age Pension eligibility age increasing to 67 in 2023.
In addition to this, the eligibility to receive spouse contributions will extended from 69 to age 74.
Royal Commission recommendation support
A portion of the budget has been allocated to providing increased funding for Financial Sector regulation and enforcement, both of which were key outcomes from the recent Royal Commission. Part of this increased funding will be directed towards providing an industry funded compensation scheme of last resort.
The above announcements are proposals only, and are yet to be passed by Parliament. Further information on the above proposals and the other proposals mentioned in the 2019 Budget can be found on Government’s Budget website.