02 Apr 2019
With an election just around the corner, a few changes to super were announced in the 2019 Federal Budget.
In his first Budget, Federal Treasurer Josh Frydenberg made only minor changes to super, with a pre-Budget announcement of new rules that would allow people aged 65 and 66 to make voluntary contributions without meeting the work test.
At the time of writing, any Budget announcements are proposals only and shouldn’t be considered final until legislation passes. We’ll continue to keep you updated as developments occur.
Breaking down the key announcements
Changes to planned tax cuts
Announced ahead of the Budget, the government confirmed that it will build on its Personal Income Tax Plan, involving:
- Immediate annual tax relief for low- and middle income earners of up to $1,080 for singles or up to $2,160 for dual income families to ease the cost of living
- Lowering the 32.5% rate to 30% in 2024-25, increasing the reward for effort by ensuring a projected 94% of taxpayers will face a marginal tax rate of no more than 30%
You can read more about these in detail, and work out how it will affect you, by visiting the Budget website.
Extending the bring-forward rule
Announced ahead of the Budget, the government announced that they would extend access to the 'bring-forward' arrangements, which currently allow those aged less than 65 to make three years' worth of non-concessional contributions, which are capped at $100,000 a year, to their super in a single year.
This will now be extended for people aged 65 and 66.
Change to voluntary super contribution rules
The government also announced that people aged 65 and 66 won’t need to meet the current work test in order to make voluntary contributions into their super. The proposal is to take effect from 1 July 2020.
What this means
Currently, they can only make voluntary concessional (before-tax) and non-concessional (after-tax) contributions if they work a minimum of 40 hours over a 30-day period in a financial year.
This will align the work test with the eligibility age for the age pension, which is scheduled to reach 67 from 1 July 2023.
Increase the age limit for spouse contributions
On top of these proposals, the government also plans to increase the age limit for spouse contributions from 69 to 74 years.
Currently, those aged 70 years and over can’t receive contributions made by another person on their behalf.
Stay in the know
For expert insight into this year’s Budget, sign up for our upcoming live Q&A webcast with our Public Policy Manager Benedict Davies on Friday 5 April at 1pm (Melbourne time).
You’ll get the chance to hear from our resident expert and ask any questions you may have about this year’s proposals, as well as the Opposition’s response to the Budget.
For more on this year’s budget and how it may affect you, keep an eye out for updates on our website as they become available, and check out the official Budget website in the meantime.