Q: If you turn 65 and retire after 1 July 2010, can you still make the $450,000 bring-forward non-concessional contribution as long as it’s before 30 June 2011? Or do you have to satisfy the work test to do so?
Trish’s response: For the benefit of other readers, I’ll first explain the contribution rule that you refer to in your question. The annual non-concessional (after-tax) contributions cap is $150,000 (for the 2010/2011 year), although Australians under the age of 65 have the opportunity to bring forward two years’ worth of non-concessional contributions.
The bring-forward rule means that it is possible to make up to $450,000 (for the 2010/2011 year) in non-concessional contributions in a single financial year, or, say, $300,000 in the first year and the balance of $150,000 over the following two years. Once you contribute more than $150,000 in a financial year, you automatically trigger the bring-forward rules for the following two years.
If you’re aged 65 or over, however, the bring-forward rule is not available. The maximum an individual aged 65 or over can contribute is $150,000 (for the 2010/2011 year) in a single financial year, and they must also satisfy a work test. If a person is aged 65 years or over and exceeds the $150,000 non-concessional cap, then the excess contributions are subject to a whopping 46.5% penalty tax.
So, your particular question relates to the situation where an individual turns 65 during a financial year. Are they still eligible to take advantage of the bring-forward rule?
My understanding of the bring-forward rule is that, provided an individual is under the age of 65 on 1 July of a financial year, then they can take advantage of the bring-forward rule during that financial year. You can confirm this with the ATO, or your accountant, or your adviser.
Now, the remaining question is: Even though a person is under the age of 65 on 1 July, what if they make the contribution after the age of 65 during the financial year? Does that then mean they must satisfy the work test, even though they are eligible for the bring-forward rule?
If an individual is aged 63 or 64 and triggers the bring-forward rules, then they can make a bring-forward representing future years in the year that they’re 63 or 64, but that does not mean they can make the contributions (related to the bring forward) in later years.
After the age of 65, the maximum non-concessional contribution each year is $150,000 (for the 2010/2011 year) – the bring forward is no longer available, except in one unusual instance. If they have turned 65, and then trigger the bring-forward rule, as explained in the earlier paragraph, then my understanding is that they must meet the work test before making the super contributions.
I believe this is an unintended consequence of the legislation because the bring-forward rules were designed so that a work test wasn’t necessary but this one seems to have fallen through the legislative gap. In any case, I suggest you confirm this view with the ATO.
Super contributions: Turning 65 part-way through the year
Contributions caps relate to financial years, not calendar years
Beef up your super using a bring forward
Wearing two contributions caps
65 and over: making super contributions
Hi - I'm Trish Power, author of 
Hello and thank you for answering my question ,Trish! I have further clarified that even if the bring fwd rule is triggered and the lcient then turns 65, not only do they need to satify the work test, they can only make a max of $150k in each consecutive contribution of the $450k cap balance, so they will have to do it over two or three different days as the rule says that the max an over 65 can contribute in any one transaction is $150k.
[...] suggest you also read my article Turning 65: Maxing out the after-tax contributions cap explaining a strange quirk in the work test rules where an individual is under the age of 65 at the [...]
[...] Turning 65: Maxing out the after-tax contributions cap [...]
[...] 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. [...]