A number of important changes to superannuation have been introduced in 2019 and 2020.  

The “Protecting your Super” changes introduced in 2019 are designed to ensure low balance accounts aren’t eroded by fees – and that you’re not paying for insurance you don’t know about or need – giving your super the very best chance to grow.

It could be time to check your super to make sure you know exactly how the reforms may affect your super account.

Here’s a quick summary of the main changes.

Changes to insurance within super for low balance accounts and for members who are under 25

From 1 April 2020, you can only take out insurance cover within your super account if your account balance reaches $6,000 and you are 25 or older, or you tell your super fund you want to take out cover.  Learn more.

Insurance within super cancelled on inactive accounts

Since 1 July 2019, you are not able to take out or maintain insurance cover in your super if your account has been inactive (no contributions or rollovers received) for a continuous period of 16 months, unless you tell your super fund that you want to keep it. Learn more about changes to insurance within super

Inactive super accounts with low balances transferred to the ATO

Since 30 June 2019, your super fund may be required to transfer your super account to the Australian Taxation Office (ATO) if your account balance is below $6,000 and has been inactive for 16 months or more. Since October 2019, the ATO will proactively reunite any balances it holds on your behalf with another active account where possible. Learn more about inactive accounts being transferred.

Fee cap

If your super balance is below $6,000 at the end of the financial year, or at the time you leave your fund, you’ll pay no more than 3% that year in administration fees, investment fees and indirect costs.

Exit fee ban

All exit fees on super accounts have been banned.

Other changes

Catch-up concessional contributions

If your total super balance is less than $500,000 on 30 June of the previous financial year and you have not fully used your concessional contributions cap in any of the previous five financial years, you may be able to make additional concessional contributions above the standard cap (currently $25,000) up to the value of your unused cap amount. Unused cap amounts can only be accrued from 1 July 2018.

Work test exemption - aged between 67 and 74

If you are 67 or over, you may be eligible to make a personal contribution to super without having to meet the work test. Generally, if you are aged between 67 and 74 you need to meet the work test exemption to make personal contributions to super. The work test means you must be ‘gainfully employed’ for at least 40 hours in any 30 consecutive day period in the financial year in which the contribution is made. 

Since 1 July 2019, an exemption from the work test applies if you met the work test in the previous financial year and your total super balance was less than $300,000 on the previous 30 June. This means from 1 July 2020, if you’re aged between 67 and 74, you may be able to make a personal contribution to super for an extra year.

The Government has announced some important changes that may make you eligible to contribute more to super for longer from 1 July 2020.

Super contributions work test age increased

From 1 July 2020, if you are under age 67, you can make voluntary personal contributions without needing to meet the work test.

The work test means you need to have been gainfully employed or self-employed (for gain or reward) for at least 40 hours in a period of not more than 30 consecutive days in the financial year (ending 30 June) before you make the contribution.^ 

Spouse contributions

From 1 July 2020, the eligibility age to receive spouse contributions has been increased from age 70 to 75. This means that you may be eligible to receive contributions made by your spouse to your super account if you are under age 75. If you are between the ages of 67-74 you may be eligible to receive spouse contributions subject to meeting the work test or work test exemption.

Bring forward non-concessional contribution cap

From 1 July 2020, if you are aged between 65 and 66 you may be eligible to make personal contributions up to $300,000 to your super account. The bring forward rule allows eligible members to bring forward up to an additional two years of personal (post tax) contributions without exceeding their contribution cap.  For information on the current contribution caps refer to ato.gov.au.

For more information on the government’s ‘Protecting Your Super’ changes go to moneysmart.gov.au.

For more information on concessional contributions refer to ato.gov.au.

^Prospective employment cannot be taken into account in relation to this work test – you must have worked at least 40 hours in the financial year before we can accept your contribution.

Be MoneySmart      

The government’s ASIC MoneySmart website offers free, independent guidance so you can make the most of your money – including more information on the ‘Protecting Your Super’ insurance in super changes, insurance calculators, education and tips.

Helpful links

  • For more information on the government’s ‘Protecting Your Super’ changes go to moneysmart.gov.au.

  • For more information on concessional contributions refer to ato.gov.au.

Be MoneySmart      

The government’s ASIC MoneySmart website offers free, independent guidance so you can make the most of your money – including more information on the ‘Protecting Your Super’ insurance in super changes, insurance calculators, education and tips.