Super changes starting 1 July 2020
There are changes to the super rules, effective from 1 July 2020 which are designed to improve fairness, sustainability and alleviate some of the pressures we are feeling as a society from the COVID-19.
Super Guarantee amnesty for employers
This SG amnesty is a one-off opportunity for employers to disclose and pay unpaid SG including interest, that they owe for their employees.
The amnesty (which runs until 7 September 2020), permits employers to lodge an SG amnesty form to disclose SG contribution shortfalls for their employees for any quarter from 1 July 1992 and 31 March 2018.
Employers that take advantage of the amnesty can claim tax deductions as part of the process and will not incur administration charges or penalties. Flexible payment plans can also be arranged. However, interest will need to be paid on the amnesty contributions paid to employees’ super fund accounts. Read more about the amnesty.
Early release of super
From 1 July 2020, super fund members can access an additional $10,000 of their super account if they are affected by the adverse economic effects of COVID-19.
Under the temporary access rules, you can access up to $10,000 of your superannuation savings. Applications must be made between 1 July 2020 and 24 September 2020. For more information, read our guide.
Temporary reduction in super pension minimum drawdowns
The government has again reduced minimum drawdown rates by 50% for account-based pensions and similar products in the 2020/21 income year. For more information, read our guide.
Removal of work test to age 67
This regulation change allows people aged 65 and 66 to make voluntary super contributions without needing to be gainfully employed. The age increase means that older Australian’s have more opportunities to make contributions to their super accounts.
Accompanying changes to the work-test rule, legislation is currently going through Parliament covering the rules for bring-forward arrangements. This further change will allow members aged 65 or 66 to use the existing bring-forward rules for non-concessional contributions to make up to three years of non-concessional contributions (3 x $100,000 = $300,000 in 2020/21) in a single financial year. At the time of writing, the legislation is before the House of Representatives, but has yet to be passed and come into effect.
The maximum age at which a member can receive a spouse contribution has been lifted. From 1 July 2020, spouse contributions can be made until the receiving spouse reaches age 75 (up from the previous age limit of 69). Receiving spouses aged between 67 and 75 will still need to meet the requirements of the work test.