Super rules that came into force on 1 July 2022 offer multiple opportunities for older Australians wanting to make super contributions to boost their retirement savings.
The two major changes are removal of work test requirements for receiving any type of super contribution for anyone under the age of 75 (except when making personal tax-deductible contributions for people aged 67 to 75), and the extension of the non-concessional contribution (NCC) bring-forward rule for anyone between age 67 and 75 (the relevant bring-forward rule eligibility criteria still apply).
The following case studies show some of the strategies available to super fund members in the new contribution window between the ages of 67 and 75.
While the new rules create opportunities to continue contributing to super up to age 75, even if you are no longer working, there are still limits to how you can contribute and how much. For example:
- Special attention must be given to members with high super account balances to ensure they do not breach the transfer balance cap (TBC)
- For members in retirement phase with an account-based pension who want to contribute more to super, you would need to open a new super account, make contributions and then potentially commence a second account-based pension (there’s nothing to stop you having more than one pension account). Alternatively, you could commute (stop) your existing account-based pension and restart it with the additional funds.