Earlier this month, the government passed Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Bill 2021 through both houses of Parliament, which has now received royal assent.
Schedule 4 of this bill amends the ITAA 1997 to apply the work test to individuals aged between 67 and 75 years who claim a deduction for personal superannuation contributions.
This change facilitates the repeal of the existing work test that applies to non-concessional and salary sacrifice contributions.
Colonial First State head of technical services Craig Day explained that when the government announced that they were going to remove the work test for non-concessional contributions and salary sacrificed contributions, they stated that they would require a work test for someone to be able to claim a tax deduction for their personal contribution between age 67 and 75.
Mr Day explained that this bill moves the work test out of the SIS regulations and into the Tax Act to require people between ages 67 and 75 to satisfy a work test or the work test exemption to claim a tax deduction.
“[However], we are still waiting on the regulations in relation to the removal of the work test,” he said.
Mr Day said the government previously stated that they would table a legislative instrument to make the required changes to remove the work test.
“That’s the next part of the jigsaw that has to be introduced for all of this to work together,” he said.
“We haven’t seen the regulations yet in relation to the removal of the work test [but] we would expect that they’re going to remove it for personal contributions because from a superannuation perspective that’s the type of contribution that we’re making.”
Mr Day said he hopes the removal of the work test applies across the board, not only to non-concessional contributions and salary sacrificed contributions but also things like personal injury contributions and contributions under the lifetime CGT cap.
“We’re really hopeful that they just remove the work test entirely, up until age 75, keeping in mind that there’s that rule that says you can contribute up to 28 days after the end of the month in which you turn 75,” he said.
