Australian Budget Summary
Australian Treasurer, Josh Frydenberg, delivered his Budget on 2nd April 2019, where there were significant changes announced regarding Australian Superannuation schemes – the details of which are outlined below.
Superannuation changes for those nearing retirement
From 1 July 2020, if you are 65 or 66 years old, you will be able to make voluntary superannuation contributions — both concessional and non-concessional — without meeting the work test.
Currently, if you are aged from 65 to 74, you must work a minimum of 40 hours over a 30-day period to meet the work test to be eligible to make voluntary contributions in the same financial year.
If you are 65 or 66, you will also be able to take advantage of the bring-forward arrangements which allow you to make three years’ worth of non-concessional contributions, capped at $100,000 a year, in a single year. Currently, only members under 65 can use this arrangement.
Remember to make sure you don’t exceed your Total Superannuation Balance caps (currently $1.6m per individual).
So for those who have migrated (or looking to migrate) to Australia and have a UK pension to transfer, this is great news. This allows those with large funds more time to transfer from UK pensions schemes. Also for people who are migrating later in life and wish to draw their pension income from a tax free environment, all is not lost. This means you have until your 67th birthday to transfer some or all of your retirement savings to Australia.
As with all Budgets, these are announcements only and have not been legislated. The details are still to be worked through, and both Houses of Parliament need to pass legislation before the announcements take effect. Parliament won’t consider these announcements until after the Federal election, expected in May this year.
If you want to know more about how this effects your situation, please contact bdhSterling online or by phone on +44 1372 724 249 (UK) or +61 1300 365 291 (AUS) and our dual licensed advisers can discuss your UK pension options with you.