Author: Emma Partenza, Manager, TAG Financial Services
Happy new financial year 2023! The 2022-2023 year brings into effect new streamlined changes in contributions.
Here is a refresher of the main changes and what’s ahead for contributions in 2023.
Removing the work test for voluntary contributions
The work test, which required an individual to work for 40 hours in 30 consecutive days to be able to contribute to super, is now removed. This means that anyone under the age of 75 will be able to make salary sacrifice and non-concessional contributions into super irrespective of their employment situation.
Individuals aged 67 to 74 years (inclusive) will still have to meet the work test to make personal deductible contributions.
Increasing the bring forward rule for non-concessional contributions for anyone up to age 75
Previously this was only available to member’s aged less than 67 years. It allows members to access future caps and bring forward 3 years’ worth of non-concessional contributions (NCC) into a financial year, without breaching the NCC cap.
Eligibility to utilise this, however, is still dependent on a member’s total superannuation balance (at 30 June 2022) being less than $1,700,000.
In addition, a member can utilise the full 3 year bring forward NCC cap (provided they were not current in a bring forward period) just prior to their 75th birthday (even though contributions cannot ordinarily be made post age 75).
We look forward to the simplification of these rules and them allowing older Australians to save for their retirement through superannuation in a tax effective investment vehicle.
Read our blog about utilising these changes as a tax planning and strategy tool in evening up balances between spouses here: Getting even with Super.
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Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686). Copyright 2022. Please do not reproduce without the expressed written consent of the author.