Issue 740, 6 March 2020
In this issue:
- Improving flexibility of super for older Australians: consultation
- Protecting Your Super (PYS) insurance issues working group
Improving flexibility of super for older Australians: consultation
Treasury has released a package of draft legislation and regulations to implement changes to make the superannuation contribution rules more flexible for older Australians.
In the May 2019 Budget, the Government confirmed an earlier announcement that it would introduce measures to exempt Australians aged 65 and 66 from the contributions work test and allow them to access the ‘bring forward’ rules for non-concessional contributions. The Government also announced the changes to the contribution rules would increase the age eligibility limit for spouse contributions. The changes are intended to apply from 1 July 2020 (see ASFA Action issue 703 for background).
Currently, the Superannuation Industry (Supervision) Regulations 1994 (SIS Regulations) allow people aged 65 to 74 to make voluntary contributions to superannuation, if they work a minimum of 40 hours over a 30 day period in a given financial year (the work test). The SIS Regulations also only allow only those aged under 70 to receive spouse contributions. The Income Tax Assessment Act 1997 (ITAA) allows people under 65 to make up to three years of non-concessional contributions under ‘bring-forward’ arrangements.
Treasury has released a consultation package comprising draft amendments to the SIS Regulations and the ITAA, to:
- allow people aged 65 and 66 to make voluntary contributions without meeting the work test
- allow people aged 70 to 74 to receive spouse contributions
- extend access to the bringforward arrangements to people aged 65 and 66.
If you have any comments you would like ASFA to consider in relation to the consultation package, please forward them to Julia Stannard by close of business Wednesday, 25 March.
Protecting Your Super (PYS) insurance issues: working group
ASFA is seeking expressions of interest for participation in a PYS insurance issues working group.
The working group will look at the treatment of claims since PYS became effective on 1 July 2019, when insurance was cancelled for members who had inactive accounts (no contributions received for 16 months prior to the cancellation date) and had made no election to maintain their insurance. There will be a particular focus on:
- eligibility
- whether there is merit in a cross-industry approach to the treatment of such claims
- the potential need for government and/or regulator involvement.
If you—or a colleague—are interested in participating or have any queries about this working group, please contact Byron Addison, Senior Policy Adviser via email or on (02) 8079 0834 by close of business Friday, 13 March.
ASFA REGULATORY WATCHLIST
ASFA’s Regulatory Watchlist (ARW) tracks developments in Legislation, inquiries, consultations
and other regulatory announcements relevant to superannuation.
