Super boost for older clients given green light

Technical resource

Since 1 July 2022, clients are able to make voluntary super contributions between ages 67 and 74 without the need to meet the work test.

Information for advisers only.

With many super account holders nervous about recent market volatility, those close to retirement will no doubt be contemplating what impact this volatility has had on their retirement plans. Will they have to push back retirement, consider lowering their income expectations or will it warrant a complete overhaul? Fortunately, there is some light at the end of the tunnel for older Australians with the Government amending legislation that provides contribution flexibility for those approaching retirement.

Since 1 July 2022, clients are able to make voluntary super contributions between ages 67 and 74 without the need to meet the work test. However, a work test is required to be met by clients within this age range in order to claim a deduction on any personal deductible contributions they make. Also from 1 July 2022, those aged 74 or younger on 1 July could make up to three years of non-concessional contributions under the bring forward rule. These measures will no doubt be a welcome announcement for those in retirement who have wanted to make additional contributions to super but have failed the meet the work test requirements.

Although more older Australians may be able to make additional contributions for a longer period of time, careful planning may still be required this financial year and into the future, as it presents an opportunity to further boost retirement savings. For example, a client who has turned 73 this year could have been eligible to make a bring forward non-concessional contribution of $330,000 this financial year. If they have done this already they will not be able to make a further non-concessional contribution until the year in which they turn 76, when they are no longer eligible to make personal contributions (with the exception of a downsizer contribution).

As an alternative, a contribution of $110,000 could be made this financial year and again next (when the client turns 74). They could then utilise the bring forward contribution of $330,000 the year after (when they turn 75 – however, the contribution must be received by the super fund before 28 days in the month following their 75th birthday). Overall, clients in this position will have been able to add $550,000 to their retirement balances.

It is also important to remember that with the gap between a member’s total superannuation balance at the previous 30 June and the current $1.9m total super balance cap is also relevant to the amount they can contribute under the non-concessional contribution rules.

These measures were first touted as an opportunity to provide contribution flexibility for those approaching retirement age. In fact, some clients who can take advantage of these changes will already be retired and as such the conversation around risk profile in retirement will need to be addressed. When faced with finite income, preserving capital will be front of mind. So perhaps a more pressing question is where the funds should be held once they are contributed. Should they remain in cash or be invested in line with the clients’ overall risk profile? The answer is not quite that black and white and will differ for each client and their comfort with an acceptable level of risk in exchange for return.

Now is the time to consult, confer and co-ordinate an approach for your clients who were previously precluded from making voluntary contributions as they had failed previous work test requirements. Checking superannuation balances and contribution history remains vitally important to ensure no excess contribution issues, or inadvertent triggering of the bring forward provisions (when not intended).

For more information on the super boost measures and how they may benefit your clients contact the BT Technical Services team on 1800 655 901 or email

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This article discusses both the advantages and disadvantages of holding insurance within super, and also discusses how clients can still have comprehensive cover and not be impacted by certain restrictions of when insurance is held in super.
Most income streams are sourced from account based pensions and insurance companies (annuities) with the same and concessional tax structure for both.
Technical resource

This document has been prepared by BT, a part of Westpac Banking Corporation ABN 33 007 457 141 AFSL and Australian Credit Licence 233714 (Westpac), and is current as at 1 July 2022. Material contained in this document is an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. This document may contain material provided by third parties derived from sources believed to be accurate at its issue date. While such material is published with necessary permission, no company in the Westpac Group accepts any responsibility for the accuracy or completeness of, or endorses any such material. Except where contrary to law, we intend by this notice to exclude liability for this material. The information in this document regarding legislative changes is intended as a guide only. It is not exhaustive and does not constitute legal advice. It is based on our interpretation of the law currently in force on the date of this notification and does not undertake to provide any updates to the extent that any of the laws or regulations referred to change in the future. Consequently, it should not be relied upon as a complete statement of the relevant laws, the application of which may vary, depending on your particular circumstances. 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. Any case studies and examples used in this document are purely for illustration only.