Preservation age and the work test in government’s sights

Preservation age and the work test in the government's sights

According to industry experts, increasing the preservation age to 67 and scrapping the work test are likely to be high on the government’s super reform agenda in the medium term, while increasing SMSF member numbers may fall to the back of the list.

The government may soon look at increasing the age at which retirees could access their super in line with recent rule changes around contributions and redundancy payments.

There’s no word yet on whether they will increase the preservation age because at the moment once you turn 65 it’s an automatic condition of release, but they’ve also increased the contribution age to 67 and everything seems to be in line with the age pension age of 67.

For proposed rules to take effect from 1 July 2020, you could make super contributions up to the age of 67 without meeting the work test.  If the government did not increase the preservation age in line with this, it could create an attractive tax reduction tool for those aged 65 to 67, where clients aged 65 and 66 can make contributions whenever they want and take that money out whenever they want and get the tax concessions along the way. I’m not sure that’s what they intended!

 

Need further help?

If you wish to discuss your options and your superannuation strategy, please call our experts. You can reach us on (07) 3023 4800 or at mail@marshpartners.com.au.

Visit our SMSF page to find out more about how we help.

 

GENERAL ADVICE WARNING: This information has been prepared without taking into account your objectives, financial situation or needs. Because of this, you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation or needs. We suggest you obtain specific financial advice from a licensed financial advisor.