If you plan to work a little longer and want to continue to contribute to your super to build your retirement nest egg, here’s some of the ways you still can.
If you’re between 65 and 74 and still working, the rules around employer-paid super contributions don’t change. Generally speaking, you’re eligible to receive super from your employer if you earn more than $450 in a month and are aged over 18. It doesn’t matter if your job is permanent, or casual.
To be eligible to receive or make voluntary contributions into your super after the age of 67, you need to meet the ‘work test’ or ‘work test exemption’. The work test means you need to have been gainfully employed or self-employed (for gain or reward) for at least 40 hours in a period of not more than 30 consecutive days in the financial year (ending 30 June) before you make the contribution.^
The work test exemption can be used if you are aged between 67 and 74 and don’t satisfy the work test, if you:
It is important that you haven’t previously made a voluntary contribution under this exemption before, as this exemption can only be used once in your lifetime.
If you are under age 67, you can make voluntary personal contributions without needing to meet the work test or work test exemption.
Generally, if you are aged between 67 and 74 and meet the work test, you can contribute to your superannuation out of your income, before tax is paid. An example of this is salary sacrifice. Salary sacrifice is where you nominate a certain portion of your before-tax salary to be paid as an extra contribution to super rather than receiving the money in your take-home pay.
The general cap on concessional contributions is $25,000 per financial year for the 2020/21 financial year. You may have a higher concessional cap if you are eligible to carry forward unused concessional cap amounts. You can read more about contribution caps on the ATO website.
These include contributions to your superannuation you make from your income after you have paid tax on it, for which you have not claimed a tax deduction. Other contributions that are counted as non-concessional contributions include:
The government may make a superannuation co-contribution to your superannuation account up to a maximum of $500 if you are a low or middle-income earner and make a personal after-tax contribution to your superannuation. For the 2020/21 financial year to be eligible, you must:
If your spouse or partner is a low-income earner, he or she may be able to claim a tax offset of up to $540 under certain conditions if they make a non-concessional contribution to your superannuation. Alternatively, your spouse may be able to split their concessional contributions made during the financial year with you into your superannuation fund. By making a contribution yourself to your partner’s super account, you could benefit from a tax rebate.
For some Australians, downsizing your family home can be a useful way to contribute a large sum into your super. If you are aged 65 or over, you may be eligible to contribute up to $300,000 ($600,000 combined for a couple) from the proceeds of the sale of your principal residence to your superannuation as a downsizer contribution. Eligible downsizer contributions do not count towards your concessional or non-concessional contribution caps – if you provide your super fund with the appropriate form before or at the time you make the contribution, nor will you need to meet rules around existing maximum total superannuation balances, the work test or maximum ages for contributions.
^Prospective employment cannot be taken into account in relation to this work test – you must have worked at least 40 hours in the financial year before we can accept your contribution.
* Gainfully employed means employed or self-employed (for gain or reward) for at least 40 hours in a period of not more than 30 consecutive days in the financial year in which the contribution is made.
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This information is current as at 20 November 2020.
The article was prepared by BT, a part of Westpac Banking Corporation ABN 33 007 457 141, AFSL and Australian Credit Licence 233714. This article provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.
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This information does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness, having regard to these factors before acting on it.