The Government has made good on its promise to exempt recent retirees from the work test, announcing that the Federal Executive Council has made a regulation to give effect to the change.
The regulation means that from 1 July next year Australians aged 65 to 74 with a total superannuation balance below $300,000 will be able to make voluntary contributions for 12 months from the end of the financial year in which they last met the work test.
Once eligible, there is no requirement for individuals to remain under the $300,000 balance cap for the duration of the 12-month period.
The $25,000 concessional cap and $100,000 non-concessional cap will continue to apply to contributions made under the exemption.
People will be able to access unused concessional cap space to contribute more than $25,000 under existing cap carry forward rules during the 12 months.
Assistant Treasurer Stuart Robert says the exemption is designed to give retirees flexibility to get their affairs in order as they prepare for retirement.
Currently the work test restricts the ability to make voluntary super contributions for those aged 65 to 74 to those working a minimum of 40 hours in any 30-day period in the financial year.