2019 Federal Budget at a glance
With an election date expected to be called very soon, the Government has unveiled the 2019 Federal Budget with a few proposed superannuation changes that will benefit older members and those preparing for retirement. Below we’ve briefly explained what this might mean noting that the Budget measures have not yet passed into law. On Friday 5 April we’ll publish any key points made by the Opposition Treasurer after he’s delivered his Budget reply on Thursday night, 4 April.
SUPERANNUATION CONTRIBUTIONS FOR OLDER AUSTRALIANS
Changes to voluntary super contributions
Currently, individuals aged 65 to 74 can only make voluntary superannuation contributions if they meet the work test – that is working a minimum 40 hours over a 30-day period in the relevant financial year. Under proposed changes, from 1 July 2020, individuals aged 65 and 66 can make voluntary contributions without having to meet the work test. This brings more flexibility. This also aligns the work test and qualifying for the Age Pension (scheduled to reach 67 from 1 July 2023).
Bring-forward rule extended to age 66
Under the bring-forward rule members aged 65 and 66 will be able to make up to three years’ worth of non-concessional contributions (after tax) - currently capped at $100,000 a year, to their super fund in a single year
Spouse contributions extended up to age 74
Individuals wanting to boost their partners’ super balance can do this up to the age of 74 with ‘spouse contributions’ – currently these payments can only be made if the receiving spouse is under age 70. This is an advantage for older Australians looking to benefit from partner contributions.
More funding will be available to improve residential home services including the release of an additional 10,000 home care packages. Aged care matters can be very complex. MyLife MySuper is here to assist members navigate often difficult to understand matters through its financial planning arm, MyLife MyAdvice.
PERSONAL TAX SAVINGS
Before the budget the government announced that low and middle-income earners will receive a tax saving of up to $1,080 per person ($2,160 for dual income families). The offset will be available for the 2018-19 (this tax year), 2019-20, 2020-21 and 2021-22 income years. Read more here
From 1 July 2024 the current 32.5 per cent marginal tax rate will drop to 30 per cent for income between $45,000 and $200,000. It is estimated at this time that 94% of Australian taxpayers will have a marginal tax rate of 30% or less.
Ahead of these proposed changes, our Service Centre is here to help, available Monday to Friday between 8am and 7pm (AEST) or email us at email@example.com.