July 1 Super changes- What you need to know


If you haven’t been keeping track of your superannuation accounts and not contributing to benefits, you may lose some valuable benefits from July 1 if your fund has not seen a contribution for at least 16 consecutive months.

There are a number of new superannuation rules starting in a few weeks. Some rules will impact people taking time out of the workforce and also those that are closer to retirement.

‘Protecting Your Super’ legislation was set up to stop Australians’ super accounts from being eroded by insurance fees and premiums they don’t need.

This is a great move for young people who were losing their valuable superannuation savings, however there are other people who may be impacted who want to keep their insurance.

The people impacted could include those with multiple super funds, Australians working overseas, those working cash in hand, the self employed, mothers on maternity leave or those not receiving the right contributions from their Employer.

We take a look at some of the changes that have come in and how they may impact you.

Catch-up concessional contributions

This is the first year you can make additional catch-up concessional contributions to your super fund, allowing eligible Australians to put more into super through pre-tax dollars. You do this by using your unused concessional contributions cap amounts from previous years.

You must have less than $500,000 on June 30 of the previous financial year to qualify for this strategy.

Also, you must not have used your entire $25,000 annual concessional contributions cap in the previous financial year. eg. Concessional Contributions last Financial year = $22,000 Contribution cap this financial year= $28,000

Under the rules, you can carry-forward up to five years of unused concessional contributions caps for use in a later financial year, but just remember that the rolled forward amounts will expire after five years.

The five-year carry-forward period started on July 1, 2018, meaning that 2019-2020 is the first year in which you can make catch-up contributions. If you are aged 65 or over, the normal work test rules apply.

Lifetime annuity means test change

Changes to the means test for lifetime retirement income streams or annuities have now come into place

Annuity payments are included in the age pension income test, but under the new rules only 60% of an annuity’s purchase price will be included in the assets test rather than the previous situation where the full purchase price is included.

The assessment rate will reduce to 30% for people aged over 84.

If you are asset tested due to your current situation, this may help to receive additional benefits by setting up a new investment of this kind and only having a portion of the investment assessed.

Loss of insurance cover

If your superannuation account hasn’t received any contributions or rollovers for more than 16 months, it is considered inactive. It will cut off your death and total and permanent disability (TPD) insurance cover.

Your super fund is legally required to inform members that they are at risk of having their insurance cancelled and you will receive an opt in option to decide if you want to keep the coverage.

If you have moved and haven’t updated your address or contact details, you will need to contact the fund to check your status.

The problem in losing your insurance cover is that you may not get the same broad cover when you reactivate it after you have lost it. If your medical situation has changed then you may not be able to get standard rates or have an exclusion applied to your insurance benefits inside super.

These rules are now inforce so you may want to check with your fund if you are unsure as there is a grace period with some funds.

Closure of inactive super accounts

If you have a super fund with less than $6000 that is classified as inactive, the funds will be transferred to the ATO who will use data matching technology to try and combine your balance with an active account you have.

Cap on fees for low balance accounts

There is now a cap on how much balances with less than $6000 can be charged with some fees being removed and capped at a level of 3% of the balance.

These is now a ban on exit fees on accounts of all balances with no penalties to rollover super benefits to another fund.

No work test for contributions in the first year of retirement

If you are newly retired and aged between 65 and 74, you will be able to make voluntary contributions into your super account without needing to satisfy the work test.

To qualify you must have had less than $300,000 in your super account at the end of the previous financial year.

The relaxation of the work test rules only applies once and you cannot make contributions in subsequent financial years without meeting the work test.

Rise in age pension work bonus

If you’re working and receiving the age pension you could be entitled to the Work Bonus, which excludes some of your pay from the Centrelink income test.

This bonus is increasing from $250 to $300 a fortnight, which means that you are able to keep more of your income and  work for short periods with little or no effect on your age pension.

Pension Loans Scheme expanded

From July 1, 2019, the eligibility criteria and withdrawal amounts for the Pension Loans Scheme (PLS) will be expanded to make the scheme available to more Australians of age pension age. Under the new eligibility rules, you must still qualify for one of the eligible pensions.

The PLS provides loans to more asset rich, cash poor pensioners who own real estate in Australia. It allows them to unlock money tied up in their own homes to help pay for day-to-day expenses through a reverse mortgage.

It can help with unexpected medical bills, household repairs or bridging aged care costs until the family home is sold.

The withdrawal amount per fortnight is increasing from 100% to 150% of the maximum fortnightly pension rate.


A number of people will be impacted by the above either in a positive or negative way.  To see how this may affect you, please all our office on (02) 9188 1547 or email

We have assisted clients all over the Macarthur region including Oran Park, Gregory Hills, Narellan, Campbelltown, Katherine Fields, Harrington Park and Elderslie.

We also serve the wider Sydney area including Parramatta, Penrith, Liverpool, Bella Vista, Ryde, Inner west and Sydney CBD.


The information on this website contains general information and does not take into account your personal objectives, financial situation or needs. It is important, before deciding whether to proceed with any of the above that you consult a licensed or authorised financial adviser if you require financial advice that takes into account your personal circumstances. You can check whether a person is a licensed or authorised financial adviser by visiting the Australian Securities and Investments Commission at

Ronald Pratap

Principal Financial Planner at RP Wealth Management | Financial Planning l SMSF I Insurance l Property Advisory. Our purpose is to provide our clients with sound advice and direction to assist with their financial affairs and help them make the best choices in achieving what is important to them.


Level 2
351 Oran Park Drive
Oran Park N.S.W 2570

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