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- Can I contribute to my super in my late 60s?
- What are the caps or limits on making super contributions in my 60s?
- What is the work test and work test exemption for contributions?
- Age restrictions on your super fund accepting your contributions in 2021-22
- Over 75? Making personal super contributions
- Downsize your home, upsize your super
As more and more birthdays roll by in your 60s, most people can’t wait to embark on the next chapter of their lives. When they think about super, it’s usually more about how to spend their retirement nest egg than how to add to it.
But that’s not true of everyone. These days Aussies are living longer and staying in the workforce longer than ever. The COVID-19 pandemic has also put paid to the retirement plans of many people, leaving more of us concerned we won’t have enough for a comfortable retirement. If that’s you and you have some cash to spare, you may be interested in topping up your super account balance.
So, what are the rules on making contributions when you’re in your late 60s?
Can I contribute to my super in my late 60s?
The short answer is yes, but the rules for making contributions into your super account can be a little confusing. Fortunately, the government has announced plans to simplify things a little from 1 July 2022, but these changes are yet to pass through Parliament and become law, so you still need to take care before making a super contribution.
Currently, if you are in your 60s, compulsory employer concessional contributions such as the Super Guarantee (SG) and mandated award or enterprise agreement contributions can still be made into your super account.
When it comes to non-concessional (after-tax) contributions, or voluntary contributions for which you claim a tax deduction, once you reach age 67 you must satisfy a work test or use the one-off work test exemption before your super fund can accept your contribution.
Once you hit age 75, your super fund is generally unable to accept further contributions into your super account.
What are the caps or limits on making super contributions in my 60s?
Whatever your age, the concessional (before-tax) contributions cap (or limit) is $27,500 each year (2021-22). From 1 July 2017 to 30 June 2021, the annual concessional contributions cap was $25,000.
Concessional contributions include your employer’s Super Guarantee contributions and any other mandated award or industrial agreement contributions, salary sacrifice contributions and any voluntary personal contributions for which you intend to claim a tax deduction.
The non-concessional (after-tax) contributions cap is $110,000 a year (2021-22). From 1 July 2017 to 30 June 2021, the annual non-concessional contributions cap was $100,000. Up to three years of annual caps (3 x $110,000 = $330,000) may be available if you are eligible to use a bring-forward arrangement.
Once you reach age 65, however, your non-concessional (after-tax) contributions cap becomes a flat $110,000 a year, as super fund members aged 65 and over are currently not permitted to commence a bring-forward arrangement.
Also, once you reach age 67, you can only make a non-concessional contribution if you satisfy a work test or the one-off work test exemption in the financial year in which the contribution is made. (The government is proposing to change this requirement from 1 July 2022 – see section below.)
What is the work test and work test exemption for contributions?
From 1 July 2020, if you have reached age 67 but are not yet aged 75, you must be ‘gainfully employed’ for at least 40 hours over 30 consecutive days in a financial year before your super fund can accept contributions into your super account.
These rules are known as the work test for super contributions and you must meet this test if you plan to continue making contributions into your super account past age 67.
The work test exemption was introduced from 1 July 2019 as a one-year exemption from the work test for people with a Total Super Balance below $300,000. This is to allow recent retirees to better prepare for retirement by boosting their super account balance if they are aged 67 to 74. The work test exemption can only be used once and only applies in the financial year following the last year you were working.
Age restrictions on your super fund accepting your contributions in 2021-22
This table summarises whether or not your super fund can accept different types of super contributions at various ages:
| Age at time of contribution | SG | Award or industrial agreement | Salary sacrifice | Voluntary tax-deductible contributions | Non-concessional | Spouse | Downsizer |
|---|---|---|---|---|---|---|---|
| 66 years or under | Yes | Yes | Yes | Yes | Yes | Yes | Yes (only available if aged 65 and over)4 |
| 67 to 74 years old | Yes | Yes | Yes1 | Yes2 | Yes1 | Yes1 | Yes |
| 75 years old or over | Yes | Yes | No3 | No3 | No3 | No3 | Yes |
1 To qualify, you must meet the requirements of the work test or work test exemption during the same financial year in which the contributions are made. (From 1 July 2022 the work test and work test exemption will no longer apply if the necessary legislation passes through Parliament.)
2 To qualify, you must meet the requirements of the work test or work test exemption during the same financial year in which the contributions are made. (The proposed repeal of the work test and work test exemption from 1 July 2022 currently will not apply to voluntary super contributions for which you claim a tax deduction.)
3 Includes up to 28 days after the end of the month in which you turn age 75.
4 The government proposes to reduce the eligible age limit for making a downsizer contribution to age 60 from 1 July 2022 if the necessary legislation passes through Parliament.
Over 75? Making personal super contributions
Once you reach age 75, you can’t make non-concessional personal contributions into your super account, even if you satisfy the work test or work test exemption.
There is one exception to this rule. If you are turning 75 during a financial year, you can make a non-concessional contribution on or before the day that is 28 days after the end of the month in which you turn 75. However, you still need to pass the work test and your lifetime super contributions or Total Super Balance (TSB) must not exceed $1.7 million (in 2021-22).
Downsize your home, upsize your super
If you can’t meet the rules for the work test or work test exemption, there is another way you can give your super account a boost – make a downsizer contribution.
If you are aged 65 or over, a downsizer contribution of up to $300,000 can be made into your super account using the proceeds from the sale of your home. For couples, both partners can make a downsizer contribution, so you can contribute up to $600,000 per couple into your super accounts.
You can make a downsizer contribution regardless of your work status or other super contributions. Currently, there is no upper age limit for making a downsizer contribution.
Downsizer contributions are not tax deductible and do not count towards your normal annual non-concessional contributions cap ($110,000 in 2021-22).
