New laws that took effect on 1 July 2019 could impact your insurance held in super. From this date, super funds are required to cancel insurance cover held in ‘inactive’ super accounts, unless the member has let the fund know they’d like to keep their insurance. Alternatively, the member can make a contribution or rollover an amount from another super fund into their account. An inactive super account is generally an account that hasn’t received a contribution or rollover for over 16 months. Members impacted by this change who want to retain the insurance, should consider acting before the cover is cancelled.
Super fund members who made concessional contributions of less than the annual cap of $25,000 in 2018/19, may be able to contribute more than the cap amount in 2019/20 and beyond. Making ‘catch-up’ concessional contributions could appeal to people who have broken work patterns, can’t afford to contribute in a particular year or receive a windfall. Concessional contributions include all employer contributions (super guarantee and salary sacrifice), personal contributions claimed as a tax deduction and certain other amounts1.
Recent retirees with lower super balances now have more time to make additional super contributions. From 1 July 2019, people aged 65 to 74 with a ‘total super balance’ below $300,0002 no longer need to meet the ‘work test’ in the 12 months after they retire. If eligible for this once in a lifetime exemption, additional voluntary super contributions can be made without having to work at least 40 hours in 30 consecutive days during the financial year.
Some significant changes have recently been made to the Work Bonus that could benefit people who are eligible for the Age or Service Pension and are still working. Since 1 July 2019, the maximum income that can be earned from employment without impacting benefits increased from $250 to $300 per fortnight. The Work Bonus is also now available to people who are self-employed.
The ‘deeming rates’ used to assess income from certain investments for various social security benefits reduced on 1 July. Some people may now receive higher payments (such as the Age or Service Pension, Disability Support Pension or Carer Payment) if their entitlement is determined by the income test. Lower deeming rates could also help some people to qualify for other income tested benefits, such as the Commonwealth Seniors Health Card or Low Income Health Care Card.
For help with these and other matters, we recommend you speak to your financial adviser. They can help you make the most of your opportunities and ensure you meet any relevant obligations.
1 Certain requirements must be met before members can make ‘catch-up’ concessional contributions.
2 On 30th of June of prior financial year
Important information and disclaimer
NULIS Nominees (Australia) Limited AFSL 236465 ABN 80 008 515 633 provides this information as trustee of the MLC Super Fund ABN 70 732 426 024. This information may constitute general advice. It has been prepared without taking account of individual objectives, financial situation or needs. Before acting on any information, you should assess or seek advice on whether it is appropriate for your needs, financial situation and investment objectives. We recommend you obtain financial and tax advice tailored to your own circumstances prior to making any investment or acquisition decision. Any general tax information is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent. This information is current as at 9 October 2019 and may be subject to change, for example should there be a change of legislation or economic conditions. An investment with NULIS is not a deposit with or liability of, and is not guaranteed by, NAB or other members of the NAB Group, and is subject to investment risk including possible delays in repayment and loss of income and capital invested. Past performance is not a reliable indicator of future performance.
Any advice and information on this website is general only, and has been prepared without taking into account your particular circumstances and needs. Before acting on any advice on this website you should assess or seek advice on whether it is appropriate for your needs, financial situation and investment objectives.
Any general tax information on this website is intended as a guide only and is based on our general understanding of taxation laws. It is not intended to be a substitute for specialised taxation advice or an assessment of your liabilities, obligations or claim entitlements that arise, or could arise, under taxation law, and we recommend you consult with a registered tax agent.
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MLC Limited uses the MLC brand under licence. MLC Limited is a part of the Nippon Life Insurance Group and not part of the NAB Group of Companies.