Super & Retirement changes from 1 July 2019

The new financial year has seen a raft of laws and scheduled changes coming into force impacting everything from extra super contributions, through to the age you can access super and the age pension.

Summary of key changes:

  • Pension age increases to 66
  • Protect Your Super laws come into force
  • The age Australians can access their super increases to 58
  • Eligible Australians now able to contribute more to super using ‘catch up’ rules
  • Relaxation of the ‘work test’ for eligible retirees to help them contribute more to super

Pension age increase to 66

Australians born between 1 January 1954 and 30 June 1955 will now have to wait until they turn 66 before they can receive the age pension. This is part of an ongoing schedule to increase the age pension to 67 by 1 July 2023.

The maximum rate for the Age Pension, including supplements, is currently $926.20 for a single person per fortnight. If you are a couple, the rate is $698.10 each per fortnight.

Protect Your Super laws

New rules called the Protecting Your Superannuation (PYS) package have now taken effect.

The key changes include low balance and inactive superannuation accounts being transferred to the Australian Tax Office (ATO), fee caps on certain balances under $6,000, the banning of exit fees and insurance cover being automatically switched off on super accounts that have been inactive for 16 months or more, unless members opt to retain it. This last item is very significant: if you or a family member have an inactive super account with insurance inside it, please contact the fund to ensure that the insurance is not cancelled automatically.

Preservation age increases to 58

The age you can access your super, known as the preservation age, is on the way up. Individuals turning 57 between 1 July 2019 and 30 June 2020 will have to wait until age 58 (from 1 July 2020) to access their super.

Playing catch up with your super

For the first time, if your total super balance is below $500,000 at 30 June 2019, the government is allowing you to play super catch up. That means you can potentially contribute more of your pre-tax income to super.

The concessional contributions (pre-tax) cap is currently set at $25,000 per year. From July 2018, if you only contribute, for example $10,000 to super, you are now allowed to carry the unused $15,000 forward into the following year. And it doesn’t end there. You can continue rolling over the unused portion of your contributions cap for up to five years.

From 1 July 2019, you can use the unused concessional cap from the previous year. Using the example above, if you have unused cap of $15,000, you can contribute up to $40,000 in 2019- 20 as a concessional contribution. This will reduce your taxable income.

Relaxation of the ‘work test’ for eligible recent retirees

This is the first-year eligible retirees aged 65 to 74 with a super balance below $300,000 (as at 30 June 2019) will be able to make voluntary super contributions for 12 months from the end of the financial year in which they last met the work test.

Currently, to make voluntary super contributions you must work a minimum of 40 hours in any 30-day period in a financial year.


As always, if you would like to receive personal advice on super or retirement, including the effect of the above changes on your situation, please contact AGS Financial Group today


Published : 10 Jul 2019

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