Changes to super 1 July 2020
30 Jun 2020 4 min readFrom 1 July 2020, several important changes to super will come into effect, which may affect your decisions around super. These are outlined below.
Increase in age for voluntary contributions
People aged 65 and 66 will now be able to make contributions to superannuation without having to meet the work test. The work test will still need to be met by those at least age 67 but under age 75.
The work test from 1 July 2020
If you are at least age 67 but under age 75, you are required to work at least 40 hours in 30 consecutive days in the financial year to be eligible to make concessional or non-concessional contributions.
The work test exemption
If your Total Superannuation Balance at 30 June 2020 is less than $300,000, you will be exempt from this work test for 12 months from the end of the financial year in which you last met the work test. This exemption applies once only.
You cannot make voluntary contributions if you have reached age 75.
The age at which you can access your super, whether you are working or not, remains at 65.
Government co-contribution
The government co-contribution income thresholds have risen and eligibility will cut out where your assessable income is more than $54,837. You can find details on the ATO website.
Carry-forward of concessional contributions
This is not a new provision, but as you have only been able to carry forward unused amounts of your concessional contributions cap from 2018/19 onwards, you can now take advantage of an additional year. This means that you may be able to take advantage of a larger threshold amount. You will only be able to carry forward your unused concessional contributions cap if your Total Superannuation Balance at 30 June 2020 was less than $500,000.
This example provides an explanation of the scheme and how it works.
Sally’s employer contributions in 2018/19 were $10,000; in 2019/20 they were $12,000 and her Total Superannuation Balance at 30 June in the previous years was under $500,000. However, her Total Superannuation Balance on 30 June 2020 was above $500,000, therefore, she is not able to take advantage of the carry-forward rule in 2020/21.
| Description | FY 2018/19 | FY 2019/20 | FY 2020/21 |
|---|---|---|---|
| Superannuation balance at 30 June of the prior financial year | Under $500,000 @ 30/6/2018 |
Under $500,000 @ 30/6/2019 |
Over $500,000 @ 30/6/2020 |
| Eligible to carry forward an unused concessional cap amount from the previous financial year? | No | Yes | No |
| General annual contributions cap | $25,000 | $25,000 | $25,000 |
| + Sally’s unused concessional cap amount carried forward from the previous financial year, if eligible | $0 | $15,000 | $0 |
| = Sally’s concessional cap amount for the financial year: (a) | $25,000 | $40,000 | $25,000 |
| - Concessional contributions made in financial year: (b) | $10,000 | $12,000 | $14,000 |
| = Sally’s total unused concessional cap at the end of the financial year (that can be carried forward if eligible): (a) – (b) + any unused concessional cap from the previous financial year that could not be carried forward |
$15,000 | $28,000 | $11,000 $28,000 =$39,000 |
If Sally’s total super balance at 30 June 2021 is once again below $500,000, she will be able to use her unused available cap accrued amount of $39,000, which is her accrued unused cap amount for the previous eligible years.
Additionally, if you take advantage of the carry-forward rule, an increased concessional contributions cap will be used to determine the amount that can be split with your spouse. You can find out more in our fact sheet Split super contributions with your spouse.
Spouse contributions
The cut-off age for spouse contributions will increase from 70 years to 75 years, which aligns with the cut-off age that applies for other voluntary contributions. You can find out more in our fact sheet Make spouse contributions work for you.
