Expert SMSF insights
Time is ticking for bring-forward legislation to move through Federal Parliament
Australians aged between 65 and 67 are still in limbo about accessing bring-forward rules for non-concessional contributions as legislation changes remained stalled in Parliament.
The Treasury Laws Amendment (More Flexible Superannuation) Bill 2020 was supposed to take effect from July 1 this year and would push the bring-forward rules up from the age of 65 to 67, enabling Australians aged up to 67 to trigger bring-forward non-concessional contribution payments.
COVID-19 has limited parliament sittings in 2020 which was the first delay for this legislation. Then, after clearing the House of Representatives, the bill was introduced to the Senate on August 31 at which point Pauline Hanson's One Nation party put forward three proposed amendments. It has been in limbo ever since.
While the legislation is expected to be passed even with these amendments, it has fallen down the list as Federal Budget measures become the priority.
With October parliamentary sessions generally reserved for Budget-related legislation and no sign of the Treasury Laws Amendment (More Flexible Superannuation) Bill 2020 on November agendas, it appears unlikely we are going to see a resolution this year.
What happens to people who are turning 67 while we are waiting for this legislation to pass?
The major problem is that there are plenty of people who have turned 67 since July. 254,800 people turned 65 years at the end of 2018, according to Australian Demographic Statistics released by the Australian Bureau of Statistics.
That would mean roughly 250,000 people have turned 67 in 2020 or will turn 67 before the year is complete. That is a rate of about 21,000 every month turning 67, which means every month that this legislation remains in limbo means potentially another 21,000 people who are missed the opportunity to use the bring-forward rule and will have lower superannuation savings.
Time is ticking, but there is not likely to be any resolution in 2020
After today, there are only eight days remaining for parliament to sit in 2020, between November 30 and December 10. The two-thirds cut-off date is set for December 3, which means that only bills that have been introduced in the previous period of sittings will be considered. This move is to stop a late end-of-sittings rush of legislation.
The problem with the Treasury Laws Amendment (More Flexible Superannuation) Bill 2020 is that once the One Nation amendments have been made, the bill will need to return to the House of Representatives before making its way back to the Senate. With precious few days remaining before the two-thirds cut-off, it opens up the likelihood that it won't be looked at again in 2020.
That complicates things even further as the next sitting date for the resumption of parliament in 2021 has not yet even been announced, although traditionally this does not occur until February. Which means we could be looking at another three months minimum before this legislation is addressed. By that time another 60,000-odd Australians will have turned 67 and missed outbringing the total since declared start date of 1 July 2020 to nearly 150,000 people.
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