Superannuation Update: New Flexibility for Older Australians
Superannuation laws have been simplified over recent years to allow older Australians more flexibility to top up their superannuation. Below is a summary of what you need to know when it comes to making superannuation contributions.
Adding to super
The two main types of contributions that can be made to superannuation are called concessional contributions and non-concessional contributions.
Concessional contributions are before-tax contributions and are generally taxed at 15% within your fund. this is the most common type of contribution individuals receive as it includes superannuation guarantee payments your employer makes into your fund on your behalf. Other types of concessional contributions include salary sacrifice contributions and tax-deductible personal contributions. Superannuation laws have been simplified over recent years to allow older Australians more flexibility to top up their superannuation. Superannuation laws have been simplified over recent years to allow older Australians more flexibility to top up their superannuation.
Super contribution options for people under 75
If you’re under 75, you can make and receive various types of contributions to your superannuation, such as:
- Compulsory superannuation guarantee contributions.
- Salary sacrifice contributions
- Personal non-concessional (after-tax) contributions.
- Contributions from your spouse
- Downsize contributions from selling your home
- Personal tax-deductible contributions
So whether you are still working or retired, you can continue to make superannuation contributions to benefit you in retirement and beyond.
If you don’t meet the work test condition, you can use the “work test exemption” on a one-off basis if your total superannuation balance on the previous 30 June was less than $300,000 and you satisfied the work test requirements last financial year. Meeting this requirement will allow you to also make personal tax-deductible contributions to superannuation.
Super contribution options for people over 75
Once you turn 75, most superannuation contributions are no longer allowed. The only exceptions are compulsory superannuation guarantee contributions from your employer (if you’re still working) and downsizer contributions from selling your home.
If you’re about to turn 75 or have just passed that milestone, you still have one final chance to make or receive other contributions. Superannuation funds can accept contributions for up to 28 days after the month you turn 75. For example, if you turn age 75 in October, the contribution must be received by your superannuation fund by 28 November.
Final Word
Changes to the contribution rules now allow more flexibility for people in their 60s and 70s to add to their superannuation. So, whether you are still working or retired, you can continue to make superannuation contributions to benefit you in retirement and beyond.