Covid resurgence top of mind for financial advisers

In the September 2021 quarter, Covid continued to be top of mind for advisers and their clients – and understandably so, as the Delta variant had forced, at one point, around 60% of Australians into strict lockdown.

Among the top five questions that advisers have asked BT’s technical team in the September quarter, two are related to Covid: the re-contributions of early release of super amounts and the extension of Covid relief for SMSFs.

The team field over 2,000 queries from advisers every quarter on technical topics relating to superannuation and investments. Advisers’ most frequently asked questions from the September quarter are as follows.

1. Re-contributing early release of super payments

Although personal freedoms had recently again been curbed in many countries and life has been far from normal, equity markets have continued to perform strongly during the pandemic. Investors who held their nerve during the pandemic’s troughs and peaks have been rewarded with very strong returns in the past 12 months.1

In addition, Australians’ savings have increased during the pandemic.2 Those who may have drawn on their superannuation as part of the Federal Government’s early release of super program in calendar year 2020, may find that they are now in a position to be able to make additional contributions into their super.

“Some advisers are pleasantly surprised to learn that their clients can re-contribute the amounts they had withdrawn under the Covid-19 early release of super program, and that those re-contributions will not be counted towards their non-concessional contributions cap,” said Mr Tim Howard, Technical Consultant in BT’s Technical Services team. “What’s more, clients have until 30 June 2030 to make the re-contributions3 – and so have a long period in which to get their retirement savings back to where they were.”

The new regulations regarding the re-contribution of Covid-19 early release amounts came into effect in July 2021, as part of an amendment stapled to the much awaited ‘bring forward’ legislation (Treasury Laws Amendment (More Flexible Superannuation) Act 2021).

2. Extension of Covid relief for SMSFs

Acknowledging the continuing impact of Covid particularly on travel and the property market, the Federal Government has extended a range of relief measures for SMSFs, to the end of the 2022 financial year.4

SMSF trustees and related parties who have been unable to return to Australia due to travel restrictions will not see their fund’s residency status impacted.

If rental relief provided by an SMSF to a tenant happens to give rise to a contravention of the super laws, the Australian Taxation Office (ATO) will not take any compliance action against the fund, as long as the relief is offered on commercial terms due to the financial impacts of Covid.5

Similarly, if loan repayment relief is provided by an SMSF to a related or unrelated party, and the relief is offered on commercial terms and is due to the financial impacts of Covid, the ATO will not take any compliance action against the fund.6

Further the ATO is providing leniency to SMSFs exceeding the 5% in-house asset threshold at 30 June 2021. The fund must still prepare a written plan to reduce the market value of the fund's in-house assets to below 5% by 30 June 2022, however will not face any compliance action if they have not executed the plan by 30 June 2022.7

3. More on SMSFs – the perennial question on owning property

Most advisers are aware that SMSF clients cannot personally make use of property owned by their fund, however this topic continues to be brought up by clients.

“Advisers are asking for certainty around what the alternate solution may be, although they may already know the answer,” said Mr Howard. “They are double checking with us, as clients who are about to retire are regularly asking advisers whether they can move into the property owned by their SMSF.”

Those clients mistakenly believe that, because they have met a condition of release, they can access the money in their SMSF or live in a property owned by the fund.

“The latter is not the case as the property would almost always cause an in-house asset issue,” said Mr Howard. “To be able to live in it, title to the property must be transferred out of the fund. Stamp duty would need to be paid and capital gains tax may be payable. Overall, the tax consequences, in many cases, make this solution costprohibitive.”

4. Indexation of the transfer balance cap

As of 1 July 2021, every individual now has their own personal transfer balance cap of between $1.6 and $1.7 million, depending on their circumstances.8

Many advisers are asking how they can obtain this information and how to calculate a client’s transfer balance cap. (Information is available on the ATO.9) In particular, some advisers are concerned that a client who is rolling over between funds might accidentally push their transfer balance account over the threshold. “Rollovers should not inadvertently impact clients’ transfer balance caps,” explained Mr Howard.

5. Removal of the excess concessional contributions charge

From 1 July 2021, the excess concessional contribution charge (ECCC) no longer applies. This means that individuals who make contributions on or after 1 July which exceed their concessional contributions cap, will not have to pay the ECCC. “Making an excess concessional contribution is no longer as onerous an issue or cost to clients,” said Mr Howard.

Those who make an excess contribution will still be issued with a determination and taxed at their marginal tax rate on any excess (with a 15% tax offset to account for the contributions tax already paid by their super fund).


1 For example, net returns for the MSCI World Index in the 12 months to September 2021 was 28.82%

2 The household saving to income ratio was 9.7% in the June 2021 quarter, well above pre-pandemic levels. In contrast, the ratio was 3.6% in the December 2019 quarter. Australian Bureau of Statistics:
Also see news article: Australians are sitting on a $140b postpandemic war chest, AFR, 30/6/21.

3 The re-contribution of the Covid ‘early release’ funds can be made between 1 July 2021 and 30 June 2030, cannot exceed the total amount of super accessed under the early release program, and cannot be claimed as a personal superannuation deduction,


5 ibid.

6 ibid.

7 ibid.


9 ibid.

More Information 

Lisa Parrett
Media Relations, BT
M: 0432 933 796