In February of 2022, the Australian Government passed The Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Bill 2021.
The passing of the Bill intends to increase flexibility for individuals preparing for retirement, increase superannuation support for low income earners and provide assistance to first home buyers.
Removal of the Work Test
Currently, if you are age 67 or over, there are restrictions on your ability to make any contributions to your superannuation.
Namely, you need to pass the “work test” by being gainfully employed for at least 40 hours over a consecutive 30 day period during the financial year you want to contribute to super.
From 1 July 2022 (assuming the legislation changes receive Royal assent), this restriction is lifted for non-concessional contributions (and salary sacrifice – but if you have the ability to salary sacrifice, you are likely already meeting the work test).
Depending on your circumstances, this can provide great opportunities to:
- Even out member balances
- Reduce potential ‘death tax’ associated with your superannuation balance
- Improve overall tax outcomes by:
- Shifting funds from your personal name into a tax-free super pension
- Shifting funds from your accumulation balance to your spouse’s tax-free super pension
Speak to your adviser, or arrange a Discovery Meeting with our team to discover if and how you could potentially benefit from these changes.
Alternatively, get in touch with us here.