2019-20 Federal Budget Report: Superannuation

The Government has increased opportunities for older Australians to make voluntary superannuation contributions and has proposed some minor administrative changes.


What was announced

  • Improved flexibility for older Australians making voluntary superannuation contributions
  • Measures to protect an individual’s superannuation balance
  • Tax relief when merging superannuation funds to be permanent
  • ATO to send electronic requests to superannuation funds for the release of money under a number of superannuation arrangements
  • Possible establishment of a Superannuation Consumer Advocate

Improved flexibility for older Australians making voluntary superannuation contributions

Currently, those aged between 65 and 74 years old may only make personal superannuation contributions where they meet the conditions of a work test, requiring the individual to be gainfully employed for at least 40 hours over a 30 day period during the relevant financial year.

From 1 July 2020, voluntary superannuation contributions, both concessional and non-concessional, can be made by older Australians, aged 65 and 66, without the requirement to satisfy the work test.  These same members will be able to make up to 3 years of non-concessional contributions under the bring-forward rule.  This increase in the age limit for the work test will align the test with the eligibility age of the Age Pension.

In addition, individuals aged up to 74 will be able to receive contributions made on their behalf by their spouse, with those aged 65 and 66 not required to satisfy the work test.

Measures to protect an individual’s superannuation

The Government has agreed to amendments to the Protecting Your Super Package announced in last year’s Budget including:
  • Extending to 16 months the period after which an account that has not received any contribution is considered inactive; and
  • Requiring the ATO to consolidate to an active account where possible, within 28 days of receipt.
The Government is delaying the start date for members under the age of 25 or with account balances of less than $6,000 having to opt-in to insurance until 1 October 2019.

Tax relief when merging superannuation funds to be permanent

Current tax relief for merging superannuation funds was due to expire on 1 July 2020. This measure will make this relief permanent.  This relief facilitates industry consolidation and is consistent with the Productivity Commission’s final report on superannuation.

ATO to send electronic requests to superannuation funds for the release of money under a number of superannuation arrangements

This change will be delivered by the expansion of the electronic SuperStream Rollover Standard used for the transfer of information and money between employers, superannuation funds and the ATO.  Self-Managed Superannuation Fund rollovers will also use this system effective 31 March 2021.

Possible establishment of a Superannuation Consumer Advocate

Funding will be provided to undertake an expression of interest to identify options to support the establishment of a Superannuation Consumer Advocate. The Advocate would represent consumers on policy discussions and also provide educational information and assistance to consumers in relation to the superannuation system.