Until 1 July 2022, if you were aged 67 to 74 and wanted to make voluntary super contribution, you had to meet a work test or get a work test exemption. Under the new rules, individuals under 75 years of age can make or receive personal and salary sacrifice contributions without meeting a work test or needing an exemption, subject to existing caps.
This change simplifies the rules around super contributions for older Australians and allows them greater flexibility as they save for retirement.
Generally, the last time your super fund can accept any voluntary contribution from you is 28 days after the end of the month you turn 75, unless you’re making a downsizer contribution.
The one exception
If you’re aged 67 to 74 you’ll need to meet the work test or work test exemption – but only if you want to claim a personal superannuation deduction for your contributions made on or after 1 July 2022.
Under the work test you must have worked at least 40 hours over 30 consecutive days in the financial year.
To use the work test exemption, you must satisfy the following conditions:
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you’ve met the work test in the previous financial year
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you haven’t been, and don’t intend to be, gainfully employed for at least 40 hours within 30 consecutive days in the financial year the contributions are made
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your total super balance with all super providers was below $300,000 at 30 June of the previous financial year, and
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you haven’t previously claimed a personal tax deduction under this exemption in any previous financial year.
Under the new rules, the work test can be met in any period in the financial year of the contribution. This is different to the previous rules, where the work test must be met before contributing.
What else do you need to know?
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If you’re making contributions to your super, there are limits on the amount of concessional and non-concessional contributions you can make each year. If you exceed super contribution caps, additional tax and penalties may apply.
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When you turn 65, you typically have full access to your super, regardless of whether you’re working or are retired.
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The value of your investment in super can go up and down. Before making extra contributions, make sure you understand and are comfortable with any potential risks.
For more information, check out the following page super contribution rules when you’re in your 60s and 70s or call us on Phone 02 9602 7200.
Source: AMP July 2022
Important:
This information is provided by AMP Life Limited. It is general information only and hasn’t taken your circumstances into account. It’s important to consider your particular circumstances and the relevant Product Disclosure Statement or Terms and Conditions, available by calling Phone 02 9602 7200, before deciding what’s right for you.
All information in this article is subject to change without notice. Although the information is from sources considered reliable, AMP and our company do not guarantee that it is accurate or complete. You should not rely upon it and should seek professional advice before making any financial decision. Except where liability under any statute cannot be excluded, AMP and our company do not accept any liability for any resulting loss or damage of the reader or any other person. Any links have been provided for information purposes only and will take you to external websites. Note: Our company does not endorse and is not responsible for the accuracy of the contents/information contained within the linked site(s) accessible from this page.