This post describes the impact of the recent 2019 Federal budget on early retirees or pending retirees. The impact has actually been very small this year and only two measures have been introduced. Note that these measures have not become law and may not be if the Labour party is successful in the coming election (which seems quite likely!).
Flexibility for people aged 65 and 66
We noted in the the Australian Super and Age Pension Rules post that:
“you cannot make non-concessional contributions to Super if you are over 65 unless you pass the works test. You cannot make contributions if you are over 75. Refer here for more details.”
In the 2019 Federal budget it was announced that voluntary concessional and non-concessional contributions can be made to Super for 65 and 66 year olds without having to pass the works test. This will apply from 1st July 2020.
Spouse Contribution Tax Offset Age limits increased
In addition to the above we noted that in relation to Tax offsets for contributions to spouse superannuation accounts:
“The offset is a small amount of no more than $540 (in 2019). You are only eligible for a full offset if your spouse earns less than $37,000, and for a part offset if your Spouse’s income is more than $37,000 but less than $40,000. Your Spouse must be under age 65, or if they’re between 65 and 69, they must be able to pass the works test.”
The above Spouse age limit is now 74 rather than 69, again from 1st July 2020 (note the works test must still be met).
How will this affect us?
If we are considering selling our home and wish to put the $600K into Super using the policy announced in the 2017 budget, AND an additional bring forwards amount of $600K from the proceeds without having to pass the works test, we could now do so at 66 rather than 64. It’s a very small benefit, but something to bear in mind.
Conclusions
The 2019 Federal Budget has very little impact on early retirees or pending retirees. The two measures introduced are of minor benefit.
Retiring early for Australians 