STRATEGY
Bring-forward contributions state of play
The ability of superannuants aged 65 and 66 to trigger the bring-forward rule for non-concessional contributions is currently uncertain. Meg Heffron examines what the current parameters for this provision are and the strategic opportunities still available to individuals in that demographic.
MEG HEFFRON is managing director at Heffron.
When the contribution rules changed on 1 July 2020 through Superannuation Industry (Supervision) In-house Asset Determination – Intermediary Limited Recourse Borrowing Arrangement Determination 2020 to allow those aged 65 and 66 to make superannuation contributions, and have contributions made on their behalf, without a work test, I hoped the equivalent changes to the bringforward rules wouldn’t be too far behind. The bring-forward rule changes will move the deadline for commencing a non-concessional contribution bring-forward period to the 30 June following the member turning 67 years of age rather than 65. In all other respects the rules will remain as they are today. The federal government’s intention is to still have these in place from 1 July 2020. That said, the
deferral of the first parliamentary sitting dates for 2020/21 until late August means we will have to wait even longer for the legislation to actually be passed.
How does this uncertainty affect someone turning 65 in 2020/21? Consider a retiree whose total superannuation balance is well short of $1.4 million, making her confident the maximum bring-forward opportunity of $300,000 will be available. She would ideally like to make non-concessional contributions (NCC) of $100,000 in each of 2020/21 and 2021/22 and make a final large contribution, consisting of three years’ worth of NCC caps, for 2022/23 – the year in which she turns 67. Continued on next page
QUARTER III 2020
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