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There are lots of rules when it comes to our super system. But not every rule applies to you at every age, so it’s worth figuring out which ones have an impact in your particular age group.
The rules at different ages govern how much and when you can contribute to super, when you can get your hands on your savings, and how much tax you will pay. These are designed to stop people taking advantage of the generous tax benefits offered as part of Australia’s super system.
To make things a bit easier to understand, here’s SuperGuide’s simple explainer of the super rules that apply in your golden years.
Super rules if you’re aged 70 plus
Once you turn 70, you have nearly reached the end of your eligibility to make contributions into your super account.
Between the age of 70 and 74, you need to meet the requirements of a work test or work test exemption if you want to make salary-sacrifice, non-concessional (after-tax), or personal tax-deductible contributions into your super account. The work test rules also apply to your spouse if you want to make a contribution into your spouse’s super account.
Once you reach age 75, the only contributions that are still permitted into your super account are employer SG, mandated non-SG and downsizer contributions.
1. Contributing to super
Superannuation Guarantee (SG)
If you are aged over 70 and being paid $450 or more (before tax) in a calendar month, your employer must still pay SG contributions (10% in % in 2021–22) on your behalf into your super account.
If you meet the eligibility conditions, super is payable for all employees, regardless of your age or whether you are working full time, part time or are casually employed.
If you don’t meet these conditions, your employer is not required to make SG contributions for you.
If you are a contractor paid ‘wholly or principally for labour’, you may be considered an employee for super purposes and entitled to SG payments.
Contributions caps
Even though you are in your 70s, there are still annual limits or caps on the amount of money you and your employer can contribute into your super account.
From 1 July 2021, the annual general concessional (before-tax) contributions cap is $27,500 for everyone, regardless of their age. From 1 July 2017 to 30 June 2021, the annual general concessional contributions cap was $25,000.
Some people may have a higher annual concessional contributions cap for a particular year. From 1 July 2018, you can also make carry-forward contributions if you qualify. Carry-forward contributions allow you to use any of your unused annual concessional contributions cap for up to five years to make a larger concessional contribution in a future year.
From 1 July 2021, the annual general non-concessional (after-tax) contributions cap is $110,000. From 1 July 2017 to 30 June 2021, the annual general non-concessional contributions cap was $100,000.
As you are over age 67, you currently need to meet the requirements of the work test or work test exemption rules if you want to make non-concessional, salary-sacrifice and personal tax-deductible contributions. (See box earlier in the article for proposed changes to the work test contribution rules.)
Work test
If you still want to make personal non-concessional contributions into your super account between age 70 and 74, you need to meet the conditions of the work test or work test exemption, which requires you to be ‘gainfully employed’ for at least 40 hours in 30 consecutive days during the financial year. (See box earlier in the article for proposed changes to the work test contribution rules.)
Once you reach age 75, you are no longer permitted to make salary-sacrifice, non-concessional or personal tax-deductible super contributions – regardless of whether or not you meet the work test requirements.
Personal (or voluntary) tax-deductible super contributions
From 1 July 2017, you can claim a tax deduction for personal tax-deductible contributions into your super account if you are aged 70 to 74, meet the work test rules and have a total superannuation balance (TSB) under $1.7 million. (See box earlier in the article for proposed changes to the work test contribution rules.)
Once you reach age 75, you are generally no longer eligible to make personal tax-deductible contributions into your super account. You can only claim a tax deduction for personal contributions you make into your super account before the 28th day of the month following the month you turned 75.
Downsizer contributions
A useful tool for getting money into your super account if you are 70 and over can be downsizer contributions, which have no work test requirement or upper age limit.
Making a downsizer contribution involves selling your home and contributing up to $300,000 into your super account ($600,000 for a couple), if you meet all the eligibility rules.
2. Withdrawing your super
Getting your money
In your 70s, you can take your super benefit whenever you want and still continue working
Paying tax on your super
If you are aged 70 or over, most people can take their super benefit tax free (apart from the members of certain public sector super funds).
Taking a super pension
If you decide to start a super pension, you will be required to withdraw a minimum amount each year based on your age.
