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From 1 July 2022, people aged 67 to 74 will no longer be required to meet the work test when making or receiving non-concessional or salary sacrificed superannuation contributions.
The repealing of the work test for voluntary contributions, announced in the Federal Budget on 11 May 2021, is aimed at giving older Australians, including self-funded retirees, greater flexibility to contribute to their superannuation. 1
The superannuation fact sheet, issued by the government, notes that retirees aged 70 today potentially had 20 years or more in the workforce before compulsory superannuation was introduced in 1992. That is why the Government has amended the work test rules to allow retirees who have not had the benefits of compulsory superannuation throughout their working lives to get more out of the superannuation system.
Applicable once you turn 67 years old until you turn 75 years old, the work test means you must have worked at least 40 hours within 30 consecutive days in a financial year before your super fund can accept any voluntary contributions for you.
A one-year exemption from the work test was announced as part of the 2018-19 Federal Budget that meant that from 1 July 2019, Australians aged 65 to 74 with a total superannuation balance below $300,000 were able to make voluntary contributions for 12 months from the end of the financial year in which they last met the work test. This was known as the work test exemption.
By removing the work test completely for voluntary contributions, it means that from 1 July 2022, if you are aged 67 to 74 you will no longer be required to meet the work test when making, or receiving, non-concessional superannuation contributions or salary sacrificed contributions.
You will also be able to access the non-concessional bring forward arrangement, subject to meeting the relevant eligibility criteria.
The existing $1.7 million cap on lifetime superannuation contributions will continue to apply. The annual concessional and non-concessional caps will also continue to apply.
Find out more about contribution caps.
Note that access to concessional personal deductible contributions for people aged 67 to 74 will still be subject to meeting the work test.
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1. Australian Government, Budget 2021-22, 11 May 2021, A more flexible retirement, at budget.gov.au
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