Govt proposes work test exemption to boost super balances

Australians aged 65 to 74 with superannuation balances under $300,000, under new draft legislation, 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.

The pre-retirees will be able to access unused concessional cap space to contribute more than $25,000 under existing concessional cap carry forward rules during the 12 moths.

This would exempt them from the current rule, which states those aged between 65 and 74 must work a minimum of 40 hours in any 30-day period to keep making super contributions.

Assistant Treasurer Stuart Robert said the legislation would give eligible older Australians an extra year to boost their superannuation, so they can better prepare for retirement.

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Given only 20 per cent of Australians currently hit the comfortable budget outlined in the Association of Superannuation Funds’ (ASFA) retirement standards, this could be the bump they need to live a better retirement.

And, women in particular could stand to benefit from the work test exemption given they retire with between $138,000 and $150,000, as opposed to men who retire with $292,500, according to ASFA stats.