What’s happening in Superannuation
There are some changes to superannuation to note from the 1st July 2020.
Removal of work test to age 67
From 1 July 2020, superannuation members aged between 56 and 66 will now be able to make contributions into their super account without having to meet the requirements of the work test. The work test limits the ability of a member to make contributions to a complying superannuation fund unless they can demonstrate that they have worked 40 hours in a consecutive 30 day period during the financial year.
This means that members aged 65 and 66 can make personal non-concessional contributions into their super account without meeting the work test. Previously the work test applied at age 65.
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.
This means that members in receipt of a pension can elect to reduce the minimum pension drawdown so as to retain more in super for the time being.
Early release of super
From 1 July 2020, super fund members in accordance with the COVID rules can access up to $10,000 of their super account if they meet the early release criteria.
Applications must be made between 1 July 2020 and 24 September 2020 and are only available to members in accumulation phase, not retirement phase.
Please note that access to your super via this program can only be done through your personal MyGov account.
FOR EMPLOYERS
Super Guarantee Amnesty for Employers
Employers are currently being offered a one-off opportunity to disclose and pay any unpaid Superannuation Guarantee (SG) amounts and to disclose SG contribution shortfalls for their employees for any quarter from 1 July 1992 until 31 March 2018.
At this stage the amnesty is available for forms lodged before 7 September 2020.
Employers taking advantage of the amnesty will not incur the normal interest, administration charges and non-payment penalties of up to 200%.
Further, the employer will be able to claim a tax deduction for any SG payments made by 7 September 2020.
