You ask a very popular question, and the rules relating to making super contributions for an individual turning 65 during a financial year are a little peculiar, due to the operation of the over-65s work test and the operation of the bring-forward rules for non-concessional contributions.

The response outlined below is of a general nature, and you will need to verify the rules applicable for your own unique circumstances with the ATO, or your accountant or adviser.

1. The general rule is that if an individual is under the age of 65 on 1 July of a financial year, then that individual can contribute more than $150,000 in non-concessional contributions (for the 2010/2011 year) triggering the bring-forward rules.
2. More specifically, an individual can bring-forward up to two years’ worth of non-concessional contributions in the year that they turn 63 or 64, but that doesn’t mean they can make super contributions beyond age 65 without satisfying a work test. For more information see article Beef up your super using a bring forward.
3. If an individual turns 65 during a financial year, and wants to make a non-concessional contribution after turning 65, then he or she must satisfy a work test.
4. After turning 65, the maximum non-concessional contribution each year is $150,000 (for the 2010/2011 year). Generally speaking, the bring-forward is no longer available, EXCEPT in one unique instance. In the year that an individual turns 65, he or she can make a non-concessional contribution greater than $150,000 (for the 2010/2011 year) triggering the bring-forward rule after turning 65, provided they meet the work test before making the super contribution.
5. The work test that enables over-65s and under-75s to make super contributions involves working 40 hours in any 30-day period in the financial year in which you intend to make the contribution.
6. In short, an individual who is 64 on 1 July of a financial year can take advantage of the bring-forward rules and make up to $450,000 (for the 2010/2011 year) in non-concessional contributions. If they make those contributions after turning 65 in that same financial year, then they can still take advantage of the bring-forward rules but they must satisfy a work test before contributing. For more information see article Turning 65: Maxing out the after-tax contributions cap.

Related posts:

1. Turning 65: Maxing out the after-tax contributions cap
2. Super contributions: Turning 50 part-way through the year
3. Beef up your super using a bring forward

According to the legislation, the transitional over-50s cap of $50,000 applies if you are 50 years or over on the last day of the financial year. A person turning 50 during a financial year can then make up to $50,000 in concessional contribution before penalty tax would apply to any further concessional contributions.

Based on the reading of section 292.20 of the Income tax (transitional provisions) Act 1997, it doesn’t seem to matter if you make the contribution before or after you turn 50 provided that you are 50 (or older) on the last day of the financial year in which you make the concessional contribution to your fund.

I explain these rules in more detail in the article Concessional contributions: Turning 50 is all about timing

For more information on concessional (before-tax) contributions, check out our Super concessional contributions: 2010/2011 survival guide

Related posts:

1. Concessional contributions: Turning 50 is all about timing
2. Super contributions: Turning 65 part-way through the year
3. Turning 65: Maxing out the after-tax contributions cap

I suggest you chat to a registered tax agent, typically an accountant to determine the best strategy for your circumstances, although you should be aware that it’s not possible to claim more than you earn as a tax-deductible super contribution. You are not permitted to claim a super contribution as a tax deduction if that super contribution creates a loss for tax purposes, or increases a loss.

You also need to decide whether making a super contribution to reduce your taxable income to zero is the most tax-effective option.

According to the ATO, only the amount of personal contributions that the ATO allows you as a deduction in your income tax return counts towards your concessional contributions cap. What this means is that the remainder of your personal contributions will count towards your non-concessional contributions cap. Presumably this triggers the bring-forward rules in the case where an individual has already made $150,000 in non-concessional contributions. I explain the bring-forward rules in the article Beef up your super using a bring forward.

As to the practical implications of having such a deduction denied, and what happens to the reporting of that part of the contribution that can’t be claimed as a tax deduction, it is possible to vary an intent to claim a tax deduction (see this link on the ATO website).

Note: In theory there is no limit on the amount you can claim as a deduction, subject to having income to claim against. The practical effect of the concessional (before-tax) contributions cap means that if you claim more than the concessional contributions cap, you will be hit with extra tax. You can find out more information about claiming deductions for personal super contributions by checking out this ATO fact sheet.

Background: For more information on when you’re eligible to make tax-deductible super contributions check out the SuperGuide article Who can make tax-deductible contributions?

Related posts:

1. Tax-deductible contributions: Meeting the 10% income test
2. Who can make tax-deductible contributions?
3. Tax-deductible contributions: timing the start of pension is essential

If your employer has not paid your super entitlements into your super fund, and your employer has gone out of business, chasing your Superannuation Guarantee entitlements can become more difficult.

Although the ATO has become more pro-active in chasing employers who fail to meet SG obligations (see article Super for Beginners, part 18: My employer hasn’t paid my SG. What can I do?), pursuing employers who may have no money becomes a serious issue.

One of the reasons for introducing the requirement to make quarterly SG payments (previously it was an annual requirement) was to minimise the non-compliance by employers, particularly if they went broke. The other compelling reason for regular payment of SG amounts was to ensure employees received the benefit of SG contributions, and derived investment earnings from those contributions, when they accrued the entitlement rather than at some distant later date.

Report your situation immediately to the ATO on the special ATO Superannuation Hotline by phoning 13 10 20. Explain the urgency of situation to the ATO. If other employees are affected, then it is highly likely one of your colleagues has already reported your employer. Even so, the more reports the ATO receives, the more likely the ATO will appreciate the urgency of your situation.

If an employer does go out of business, then the employees lose jobs and sometimes lose entitlements such as wages, SG contributions and annual leave and long service leave entitlements. When a business collapses, employee entitlements are paid before secured creditors such as banks. In practical terms, what this means is that after assets are sold (if any), then before anyone else, employees get paid wages and superannuation, then leave entitlements and then redundancy entitlements.

The bad news is: if there is no money left, then employees receive nothing unless they are eligible for the Federal Government’s General Employee Entitlements and Redundancy Scheme (see this link or phone 1300 135 040). This scheme protects employee entitlements, such as unpaid wages, accrued annual leave and long service leave, and up to eight weeks of redundancy entitlements for employees of companies that go broke (although the Gillard Government flagged improvements to payments prior to the August 2010 election). Compulsory employer super contributions (SG) don’t count as an employee entitlement for the purposes of a scheme, although any voluntary super contributions do count as an employee entitlement (up to 3 months’ worth). Voluntary super contributions include contributions made under a salary sacrificing arrangement (concessional contributions) and any non-concessional (after-tax) contributions intended to be redirected on your behalf by the employer. For more information about GEERs, click on the link in this paragraph.

When is SG payable under normal circumstances?

Your employer must pay your quarterly Superannuation Guarantee (SG) entitlements by a certain date (see table below), and most employers do the right thing. For the benefit of other readers I outline how an employee can check whether an employer has paid his or her Superannuation Guarantee (SG) entitlements.

How to check that your employer has paid your SG entitlements – in 3 steps

1. Check that the payment date has passed for your employer’s quarterly SG contribution (see table above). Your employer may pay your SG entitlements more frequently – monthly or even fortnightly.
2. Ask your employer, or your employer’s payroll officer if, and when the SG contribution was made.
3. Check with your super fund via the telephone, or via the internet (if you have online access to your super account details), that the SG contribution was received by the fund.

What information do I need to give to the ATO?

Before you phone the ATO on 13 10 20, try to collect the following information:

• Your tax file number
• Your employer’s Australian Business Number (ABN). You can find this number on the company’s stationery or on receipts etc
• Your employer’s name, address and contact details.

Related posts:

1. Super for beginners, part 18: My employer hasn’t paid my SG. What can I do?
2. Super for beginners, part 2: My first job
3. SG made easy: just add Medicare

I suggest you report this situation to the ATO on the special ATO Superannuation Hotline by phoning 13 10 20. Explain the urgency of situation to the ATO, and also to the super fund where you have your account. Your employer may have a contractual arrangement with your super fund, which means the super fund can also chase these payments on your behalf.

The ATO has stepped up its compliance program in chasing slack employers who fail to pay SG contributions on behalf of employees. According to August 2010 newspaper reports, the ATO was successful in collecting $700 million in unpaid SG entitlements in the previous financial year (2009/2010), and expects to take action on more than 17,500 employee complaints during the 2010/2011 year.

According to the ATO, the industries that have a reputation for SG non-compliance include road freight/transport, automotive repair and electrical services industries.

Background: Your employer must pay your quarterly Superannuation Guarantee (SG) entitlements by a certain date (see table below), and most employers do the right thing. For the benefit of other readers I outline how an employee can check whether an employer has paid his or her Superannuation Guarantee (SG) entitlements.

Note: An Australian employee who is considered to be a temporary resident, can claim their super benefits by applying for a Departing Australia Superannuation Payment (DASP) (click here for more information ) when leaving Australia.

If an employer fails to pay SG then the employer is liable for the Superannuation Guarantee Charge which involves paying the SG owed, plus an interest premium, plus an administration fee.

In the situation where a temporary resident is involved, presumably the ATO will arrange payment of the SG owing to the temporary resident by remitting the amount overseas in accordance with the DASP application. Note that tax will be deducted from the DASP.

You may also find helpful our article Superannuation Guarantee: Do we have to pay SG for overseas workers?

How to check that your employer has paid your SG entitlements – in 3 steps

1. Check that the payment date has passed for your employer’s quarterly SG contribution (see table above). Your employer may pay your SG entitlements more frequently – monthly or even fortnightly.
2. Ask your employer, or your employer’s payroll officer if, and when the SG contribution was made.
3. Check with your super fund via the telephone, or via the internet (if you have online access to your super account details), that the SG contribution was received by the fund.

What information do I need to give to the ATO?

Before you phone the ATO on 13 10 20, try to collect the following information:

• Your tax file number
• Your employer’s Australian Business Number (ABN). You can find this number on the company’s stationery or on receipts etc
• Your employer’s name, address and contact details.

What if my employer has gone broke?

If your employer has not paid your super entitlements into your super fund, and your employer has gone out of business, chasing your SG entitlements can become more difficult. I explain this scenario in Super for Beginners, part 19: My employer has gone broke. What happens to my SG entitlements?

Related posts:

1. Super for beginners, part 19: My employer has gone broke. What happens to my SG entitlements?
2. Superannuation Guarantee: Do we have to pay SG for overseas workers?
3. Super for beginners, part 2: My first job

At the time of writing this article, four days before the 2010 Federal Election, we are still waiting for the Liberal/Coalition policy on superannuation and retirement. Perhaps they don’t have one. The Liberals have however released a Seniors policy which does allude to some superannuation and retirement policies.

From SuperGuide’s perspective, the highlights from Liberal/Coalition Seniors policy document include:

• Indexing the Commonwealth Seniors’ Health Card income thresholds from 1 July 2011. Note that the income thresholds for the Commonwealth Seniors Health Card (CSHC) have not been indexed for nearly 10 years, which makes this announcement particularly newsworthy. I explain the CSHC in the article Are you eligible for a Commonwealth Seniors Health Card?
• Abolishing the age limit for Superannuation Guarantee (SG) entitlements, from 1 July 2013. Like the ALP’s plan to extend the age limit for SG to 74, this policy change won’t take effect until potentially after the next Federal election. Even so, recognising that SG is a work entitlement regardless of age is clearly a step in the right direction for older workers. I explain the SG rules in the article No SG for over-70s: now, that’s not fair.

The Liberal Party and Nationals have also promised the following changes for Seniors, namely Australians aged 50 and over:

• Seniors’ Employment Incentive Payment. This payment will be paid to employers who hire workers aged 50 or over, provided the jobseeker is currently unemployed and registered with Centrelink, or out of the workforce and registered with Centrelink. The employer must employer the worker for a minimum six months and the employer will receive a one-off payment of $3,250 (equivalent to $250 a fortnight). According to Liberal party documents, around 900,000 Australians aged 50 to 65 would potentially be eligible to be employed under this scheme.
• Consider issuing bonds for terms of up to 30 years. The Liberals believe that the recent market turmoil has created a greater need for certainty of investment returns. The maximum term for Australian Government bonds is 15 years, which “limits the period for which Seniors can make highly secure investments”. The Liberals/Coalition promise to direct the Australian Office of Financial Management to examine using bonds for terms of up to 30 years.
• ‘Safer Seniors’ Programme. The Liberals are going to put aside $7.5 million to allow local councils to apply for grants funding of up to $100,000 a year to supplement existing Senior safety programs run by local councils, or for local councils to establish new programs.
• New Minister for Ageing and Seniors. The Liberals/Coalition intends to appoint a Minister for Ageing and Seniors. The policy paper notes that Canada, New Zealand and Western Australia have ministers responsible for ‘Seniors’.

Related posts:

1. Are you eligible for a Commonwealth Seniors Health Card?
2. Not all super payments count for Seniors Health Card from July 2009
3. Good news: Super pension income excluded from Health Card test

Trish’s response: I need to be careful that any response I provide is not taken for specific tax advice. Anyone considering tax minimisation strategies should consult with a registered tax agent, typically an accountant.

Are you eligible for SATO?

Generally speaking, any individual who has reached Age Pension age needs to work out whether they’re eligible for the Senior Australians Tax Offset (SATO). SATO is a tax rebate against tax payable on income, available to eligible taxpayers.

An individual who has reached Age Pension age (65 for men, and since Janauary 2010, 64 years for women) may be eligible for the Senior Australians Tax Offset (SATO).

If a person is eligible for the SATO, then such an individual can expect to receive a rebate (tax offset) for all or part of the income tax payable, subject to a person’s income falling within the SATO income thresholds. Some individuals can expect to pay no tax at all, or pay a lower amount of tax, compared with an individual who is not eligible for SATO. I explain how SATO works, and the income thresholds for SATO eligibility, in the article No tax in retirement because you SATO.

If your income exceeds the SATO thresholds however, then the tax bill on your income will be the same as other taxpayers earning similar income (see tax rate table later in the article).

New income test: ‘rebate income’

Note: Since the 2009/2010 financial year, reportable super contributions, such as personal deductible contributions and Superannuation Guarantee contributions are added back to an individual’s income when determining eligibility for SATO. The income test that applies to SATO (and to the pensioner tax offset) is ‘rebate income’.

According to the ATO, rebate income includes a person’s:

• taxable income
• adjusted fringe benefits (reportable fringe benefits x 0.535)
• total net investment loss
• reportable super contributions.

Personal income tax rates

The income tax rates for ordinary taxpayers for the 2010/2011 financial year are:

Source: ATO

Individuals on lower incomes may be eligible for the Low Income Tax Offset (LITO). If an individual is eligible for the maximum LITO ($1,500 for the 2010/2011 year), the effective tax bill is nil for those earning up to $16,000. The LITO gradually reduces as assessable income increases, and is no longer available when an individual’s assessable income reaches $67,500.

In relation to your question about the 30% tax rate: even where a person is eligible for SATO, the individual is subject to the same tax rates as other individuals when calculating the income tax payable. Making tax-deductible super contributions can reduce taxable income, and in turn reduce the amount of tax payable. In terms of SATO eligibility however, although SATO is a rebate that then reduces the final tax payable, making tax deductible super contributions no longer reduces income for the purpose of SATO eligibility. For more information on making concessional contributions, check out our guide, Super concessional contributions: 2010/2011 survival guide.

Related posts:

1. No tax in retirement because you SATO
2. Working longer reaps tax benefits for over-55s
3. For your convenience: Income tax rates for the 2010/2011 year

Trish’s response: I need to divide your question into four parts: making super contributions, accessing super benefits, running an income stream and tax management strategies.

Before I do provide an answer, I must point out that this site does not give financial advice or tax advice. We are an information site which means any response that I give is a general response for the benefit of all visitors to our site, rather than a response that you can rely on as personal advice. In short, I will be explain the contribution rules for over-65s, when Australians can access super benefits, the rules that apply when a super account is in pension phase and the tax management strategy that you mention in your question.

Making super contributions

Anyone aged 65 or over, must satisfy a work test before making super contributions. The work test involves working 40 hours in any 30-day period in the financial year in which you plan to contribute. You must be paid for that work.

Note: Anyone under the age of 65 can make super contributions without satisfying a work test.

You can make two types of contributions – concessional and non-concessional. Concessional (before-tax) contributions are subject to a 15% contributions tax upon entry to the super account, while non-concessional (after-tax) contributions are not subject to this super tax upon entry into the super fund. I explain the contribution rules for over-65s in more detail and related articles on the general contribution rules in the following articles:

• 65 and over: Making super contributions
• For over 65s: ten super tips when making super contributions

Note: Owners of small businesses may be eligible for special capital gains tax (CGT) concessions when planning for retirement (click here for the ATO link on the topic), including a special CGT cap when contributing business proceeds to super.

Accessing super benefits

You can access your benefits when you satisfy a condition of release. For most Australians, the condition of release that applies is reaching preservation age (at least age 55) and retiring.

Reaching the age of 65 is also a condition of release, which means that you don’t have to retire to access your super benefits on or after the age of 65.

An individual aged, say 63, would need to satisfy a condition of release, such as retiring or starting a transition-to-retirement pension (TRIP) to access preserved super benefits.

I explain the conditions of release in my article 12 legal reasons to cash your super. You can also visit the ‘accessing super’ section of this website for more articles on accessing super benefits.

Note: If you access your super benefits on or after the age of 60, your super benefits are free of tax (unless you’re a member of certain public sector funds known as ‘untaxed funds’). You can find more information on the tax treatment of super benefits in the ‘super & tax’ section of this site.

Running an income stream

You don’t have to be receiving a superannuation pension (also known as a superannuation income stream) to access your super benefits, but earnings on a super account are taxed differently depending on whether your super account is in pension phase or accumulation phase.

In simple terms, accumulation phase is when you haven’t started a pension/income stream. Any earnings on fund assets while in accumulation phase are subject to 15% earnings tax. When a super account in pension phase, any earnings on fund assets are exempt from tax. Starting a pension means tax-free fund earnings.

Note: Tax-free fund earnings are different from tax-free super benefits payable from a super fund. The difference is that fund earnings relate to the super fund, while super benefits relate to the individual receiving the benefits.

If an individual is under the age of 65 and hasn’t retired, and wants to access super benefits then a popular strategy is to start a transition-to retirement-pension (TRIP) which enables a working individual aged at least 55 years to access a maximum of 10% of their super account each year as pension payments. I explain the rules applicable to TRIPs in my article Starting a TRIP takes planning.

Tax management strategies

Many Australians use a super fund to save for retirement because the Government provides tax incentives to do so. The deal is that you get tax breaks for locking your money away until you retire. I provide a summary of how super is taxed in my article Four must-knows about super’s tax rules and in the ‘super and tax’ section on this website.

If you’re considering tax management strategies then the best person to talk to is a registered tax agent, typically an accountant. Any discussion in this article on tax matters is for illustrative purposes only.

The general rule is that if an individual is paying income tax of 15% or less on personal income, then saving via a super fund is not a tax-effective option. For the 2010/2011 year, anyone with a taxable income of less than $37,000 pays a maximum of 15% income tax, which means saving via a super fund is usually a tax-neutral option.

If you have reached Age Pension age, then you’re likely to be eligible for the Senior Australians Tax Offset (SATO) which means you may not pay any tax on your non-super income. SATO is not available if your income is significant. I explain SATO in my article No tax in retirement because you SATO.

So, the main message is: if your marginal rate of income tax is 15% or less, then superannuation may not offer any tax breaks. With every general rule however there are a few exceptions including the following:

1. Accessing co-contribution scheme. A co-contribution is a tax-free payment from the Government, paid directly into your super account. If your income is under a certain threshold, and you’re working, and you make a non-concessional (after-tax) contribution, then the Government makes a tax-free payment to your super fund. Receiving a 100% tax-free return on a $1,000 super contribution can be a very tax-effective decision. I explain the co-contribution in my article Cashing in on the co-contribution rules.
2. Taking benefits from super on or after age 60. Super benefits paid from a super fund on or after 60 are tax-free (except for benefits paid from some public sector funds) which means tax-free super income beats paying income tax.
3. Starting an income stream/pension. A super account in pension phase is not subject to earnings tax on the account’s earnings, so an individual aged 60 receiving a superannuation pension receives tax-free benefit payments, and the super fund pays no tax on its earnings. The super payments are not counted as ‘taxable income’ which means an individual could receive, say, $100,000 a year, from his super fund and still earn nil taxable income. Even when an individual starts a pension before the age of 60, tax offsets and how an individual structures their salary (if any) and pension payments can mean a lower tax bill than if they hadn’t used the super structure.

Note: Seek tax advice if you’re considering using a super fund as a means of minimising tax.

Related posts:

1. Super for beginners, part 17: Four must-knows about super’s tax rules
2. Super for beginners, part 16: Tax-free twice
3. Retirement: Taking benefits before the age of 60

Trish’s response: Reducing the amount of income tax payable, including income tax payable on net capital gains, by making concessional (tax-deductible or salary sacrificed) super contributions remains a popular strategy.

Concessional contributions will be subject to 15 per cent tax when entering the fund. Note that the annual limit for concessional contributions is $50,000 for anyone aged 50 or over for the 2010/2011 year. The contribution cap is $25,000 (for the 2010/2011 year) for anyone under 50 years of age.

A self-employed or non-employed individual can only claim deductions for super contributions against assessable income, such as salary, investment income and capital gains.

Entering a salary sacrifice arrangement (making before-tax contributions to a super fund pursuant to an arrangement with an employer) is another popular strategy used to reduce an individual’s taxable income.

Related posts:

1. Know your super limits: Reducing CGT via concessional contributions
2. Managing CGT with super contributions
3. Non-cash contributions, CGT and contributions caps

Unfortunately, timing is very important when claiming a tax deduction for super contributions, and when starting a pension.

You must complete and lodge a ‘Notice of intent to claim or vary a deduction for personal super contributions‘ and supply it to your super fund before you start an income stream/pension if those tax-deductible (concessional) contributions form part of the pension assets.

The notice is now called a section 290-170 notice (formerly known as Section 82AAT notice).

Note that you must lodge this notice with your super fund, and receive acknowledgement from your super fund before you lodge your tax return. The trustee (you, when talking about a SMSF), then uses the notice to determine the treatment of the contributions for benefit component purposes, and to report the contributions in the super fund’s tax return.

Background: According to the ATO, you must lodge a notice of intent to claim a deduction with your super fund before whichever of the following occurs first:

• the day you lodge your income tax return for the year the contributions were made
• the end of the income year after the income year in which you made the contributions.

Related posts:

1. Concessional contributions: what form do I use to claim a tax deduction?
2. Who can make tax-deductible contributions?
3. Tax-deductible super contributions: Claim no more than your income

The 10% income test (also known as ‘maximum earnings as an employee’) has changed effective from July 2009.

An individual is able to claim a tax deduction for super contributions if he receives part of his income as an employee but less than 10% per cent of his assessable income and reportable fringe benefits are attributable to employment as an employee. Note that employment income includes reportable employer super contributions, such as salary sacrifice contributions, but doesn’t include Superannuation Guarantee contributions.

Assessable income is gross income before any deductions are allowed, and includes salary and wages, dividends, interest distributions from partnerships or trusts, business income (including personal services income), rent, foreign source income, net capital gains and a few other items. Reportable employer super contributions are also added back to assessable income when working out whether an individual satisfies the 10% test – the employment income divided by total income must be less than 10% for an individual to claim a tax deduction for his or her own super contributions.

I explain the rules for tax-deductible super contributions in more detail in the article Who can make tax-deductible contributions?

I suggest you chat to a registered tax agent, typically an accountant to determine the best strategy for your circumstances.

Background: According to the ATO website:

You are eligible to claim a deduction if:

• your super fund or RSA provider has acknowledged your notice of intent and agreed to the amount you intend to claim as a deduction.
• you satisfy the ‘maximum earnings as an employee’ condition
• you meet the age-related conditions
• you made personal contributions to a complying super fund or a retirement savings account (RSA)
• you made the contributions in order to obtain super benefits for yourself, or for your dependants in the event of your death
• you have written to your super fund or RSA provider, in the approved form Deduction for personal super contributions (NAT 71121, PDF 188KB), and advised them of the amount you intend to claim as a deduction

Related posts:

1. Who can make tax-deductible contributions?
2. Tax-deductible super contributions: Claim no more than your income
3. Super for beginners, part 6: Can I make concessional (before-tax) contributions while I’m unemployed?

Background: The co-contribution is a tax-free super contribution from the Federal Government when you make a non-concessional (after-tax) contribution. If your ‘total income’ is $31,920 or less (for the 2010/2011 year), the Federal Government pays $1.00 for every dollar you contribute to your super fund in after-tax dollars, up to a maximum of $1,000 a year. If your ‘total income’ is more than $31,920, your co-contribution entitlement reduces by 3.33¢ for every dollar you earn over $31,920, until it cuts out at $61,920.

Generally speaking, an individual is eligible for the co-contribution where the individual has been an employee, or carried on a business during a financial year, even for part of the year, subject to satisfying the work test, income test and age test associated with the co-contribution scheme.

Retiring in a financial year will not necessarily preclude someone from claiming the co-contribution, but it may affect an individual’s ability to meet the co-contribution work test (10% or more of total income from employment or carrying on a business, or a combination of both).

I explain the eligibility rules in the article Cashing in on the co-contribution rules. The ATO website also has some useful information on the co-contribution rules: For example, quoting directly from the ATO website:

You may be eligible for the super co-contribution if all of the following apply:

• you make an eligible personal super contribution by 30 June each year into a complying super fund or RSA and don’t claim a deduction for all of it
• your total income (minus any allowable business deductions) is less than the higher income threshold
• 10% or more of your total income is attributable to eligible employment-related activities, carrying on a business or a combination of both
• you are less than 71 years old at the end of the year of income
• you are not the holder of a temporary visa at any time during the income year, unless you are a New Zealand citizen or holder of a prescribed visa
• you lodge your income tax return for the relevant income year.

Your super fund needs your tax file number (TFN) before it can accept your personal contribution or a super co-contribution from us.

Related posts:

1. Co-contributions: Can I claim the tax-free bonus as a property investor?
2. Cashing in on the co-contribution rules (2010/2011 year)
3. Super contributions: Turning 65 part-way through the year