2020-21 Superannuation and Retirement Planning Opportunities

2020-21 Superannuation and Retirement Planning Opportunities

Super contribution opportunities

Additional contribution opportunities may be possible in 2020/21. With the recent decline in investment markets, where your total superannuation balance (TSB) has fallen below specific thresholds, new contributions may be possible to rebuild wealth.

TSB < $1.6 million at 30 June 2020

  • Making non-concessional contributions up to the annual cap of $100,000
  • Accessing the spouse contribution tax offset up to $540
  • Making an NCC to receive up to a $500 government co-contribution

TSB < $1.4 million at 30 June 2020

In addition to those states under TSB < $1.6million:

  • Making NCCs up to the maximum bring-forward provisions of $300,000
  • If TSB is between $1.4m and $1.5m, one year of bring forward provisions can be used, meaning up to $200,000 can be contributed in 2020/21

TSB < $500,000 at 30 June 2020

  • Clients that have not fully used their annual CC caps across 2018/19 or 2019/20 will be able to carry-forward these unused amounts
  • Annual CC cap for 2020/21 will be the sum of the general CC cap of $25,000 plus any unused amounts from prior two years

TSB <$300,000 at 30 June 2020

  • If you are aged between 67 and 74 and meet the work test (40 hours over 30 consecutive days) in 2019/20, you may be eligible to make voluntary contributions through meeting the work test exemption requirements in 2020/21

Increase to work test and spouse contribution ages
Regulations were made on 28 May 2020 to increase the age from which the work test must be met from 65 to 67 from 1 July 2020. This means that individuals aged 65 and 66 may now have an opportunity to make voluntary contributions to superannuation from 1 July 2020. This means the work test requirements will align with Age Pension age, which will reach age 67 from 1 July 2023.

The regulations have also increased the age limit for spouse contributions from under age 70 to under age 75.

Important note regarding the bring-forward rule: Changes to the eligibility age for the bring forward rule have not yet been passed by Parliament. Originally, it was proposed that from 1 July 2020, individuals may be able to trigger the bring-forward provisions if aged less than 67 (up from <65)

Pension payments halved

In response to falling investment markets occurring through the COVID-19 crisis, the minimum pension drawdowns are halved for the 2019/20 and 2020/21 financial years.



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