Q&A: Can property sale proceeds go into super after retirement?

Transcript

A: When we’re looking at making contributions to super, we obviously need to look at the rules, the relevant around making those contributions. By way of background, contributions are allowed up to age 75. Then we need to look at the specific types of contributions.

If you’re looking to make an after-tax contribution to super, what we call a non-concessional contribution, there’s no requirement to be working. Up until age 75, you can make a non-concessional contribution, again, without needs to be working. But you do need to have a total super balance within the allowed limits. Currently, for the current 2025 financial year, your total super balance needs to be below $1.9 million at the prior 30th of June. So non-concessional contributions would be allowed up to 75, so long as you’ve got less than that $1.9 million total super balance.

If you’re looking to make a concessional contribution, however, so one on which you can claim a tax deduction, the rules just changed slightly. If you’re between age 67 and 75, you do need to meet a work test. That’s that required 40 hours of gainful employment over a 30 consecutive day period.If you’re under 67, you can make those concessional contributions without the need to meet a work test.

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Now, what stood out with your question was, can you contribute to your pension. The specific consideration here is, no, you can’t contribute or add further capital to an existing pension that you may have. All contributions you make to super need to go to your accumulation account first, and then you can decide what you want to do with it after you’ve made that contribution to super. You make the contribution to your accumulation account, you can leave it there, or you can then use that money to commence a pension. Just something to be aware of.

When it comes to the amount you can contribute, you said you’re selling some investment properties, be aware, as I’m sure you are, there are limits on what you can contribute to super. When it comes to non-concessional, it’s the annual limit of $120,000 per annum. Or can use this year’s plus the next two financial years contribution limits in one go.  What we call that bring forward rule. The reason I’m going through this is if you’re selling an investment property, you’re probably going to have a large amount of capital and you may be looking to make large contributions. You could be limited to your $120,000 per annum non-concessional contribution, or you could use, as I said, that three-year bring forward rule.

If you are looking to use that three-year bring forward rule, just need to know what your total super balance was on 30th of June 2024. You’ll see here on this slide, if your total balance on 30th of June 2024 was below $1.66 million, you can use the entire lot of those three-year contributions being the $360,000. If your balance at 30th June 2024 was above that, above that $1.66 (million) and less than $1.78 (million), you’ll see you can only use two years or $240,000 worth of those bring forward contributions. Again, just keep in mind those limits. Look at what your total super balance was on 30th June 2024, and it’ll give you an indication on what you can contribute this year.

Just something to be aware of, though, from 1 July this year, so from 1 July 2025, so we’re talking about next financial year, there is a slight change. The transfer balance cap is being indexed from $1.9 to $2 million. And a flow on from that is that it allows people with higher total super balances to make a contribution to super under the non-concessional contribution rule.

You’ll see here, for instance, if your total super balance on the 30th of June 2024 was below $1.66 million, it gives you access to that three-year cap of $360,000. That amount, that limit, goes up to $1.76 million from 1 July this year. You can put in an extra $100,000 based on those bring forward rules. Just be aware of that change in the total super balance and the transfer balance cap rules. It means people with higher balances can now contribute into super. Just something to be aware of.

If you want to know more about that, have a look at the non-concessional contributions guide and the concessional guide, which we’ll get to in a second. But on the website, we have the non-concessional contributions guide for the current year. Of course, from 1 July, you’ll see the new updated version of that.

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We’ve spoken here about making non-concessional contributions. Because you are selling an investment property, it might be interesting to look at the concessional contribution rules. These are contributions we make to super and we are eligible for a tax deduction. Age restrictions here, the one that applies to you, I think you said you were 60, so it’s 18 to 67, no work test requirement.

If you were over 67 and under 75, you need to meet that work test, as I did mention before. But understanding that means that you might be able to make a concessional contribution on top of your non-concessional and get a tax benefit from that. Just something to be aware of. Again, jump online and have a look at the concessional contributions guide on the website.

If you want to know more about making a catch-up (carry-forward) concessional contribution, these are the rules that allow us to make a large contribution in a financial year on which we can claim a tax deduction. It’s a concessional contribution by utilising amounts that we didn’t contribute in the last rolling five-year period. If I didn’t use up all of my concessional cap for the 24-year or the 23-year, going back on a rolling five-year basis, I can contribute those amounts this year and get a tax deduction for a much higher amount.

Jump on the website for members and have a look at that catch-up concessional contribution rules that we’ve got there for you.