Individuals aged 67-74 now have greater opportunity to contribute to super with the following changes:
- the removal of the work test for personal (after-tax) contributions and salary sacrifice contributions, and
- an increase to the amount of after-tax contributions that may be made within a single financial year.
Removal of work test
Prior to 1 July 2022, the work test required you to undertake work for at least 40 hours in a consecutive 30 day period in the financial year a super contribution is made. Alternatively, you may have been eligible to apply the work test exemption.
This requirement has now been removed for individuals aged 67-74 if making personal after tax contributions and salary sacrifice contributions. The removal of the work test may make it easier for you to make contributions.
It is important to note that the work test (or work test exemption) still applies if you make a personal contribution and wish to claim a tax deduction.
Other eligibility requirements to make contributions continue to apply, such as total super balance limits and contribution caps.
Increasing limits on after-tax contributions
Caps apply to limit the total contributions that you can make to super. The current annual non-concessional contributions (NCC) cap is $110,000 . NCCs include:
- personal contributions for which you don’t claim a tax deduction
- spouse contributions, and
- certain amounts you may transfer from an overseas super fund.
If you meet certain requirements, you may be eligible to ‘bring-forward’ NCCs from future financial years, to make even larger contributions. This is known as the ‘bring-forward rule’. If you’re eligible, you may be able to contribute up to $330,000 either in a single financial year, or over a three year period.
Prior to 1 July 2022, you needed to be under 67 on 1 July of a financial year to be eligible to use the bring-forward rule. This requirement changed on 1 July 2022 and you may be able to access the bring-forward rule if you’re under 75 on 1 July of the financial year. Other eligibility rules will continue to apply, such as the total super balance limits.
The following table summarises the maximum NCCs that can be contributed in 2022/23 based on your total super balance as at 30 June 2022.
|TSB thresholds and bring forward caps from 2022/23|
|TSB on 30 June 2022||NCC cap|
|$1.59m to < $1.7m||$110,000|
|$1.48m to < $1.59m||$220,000|
NOTE: Contribution caps apply to both concessional and non-concessional contributions. Care should be taken to avoid breaching your cap as additional tax and penalties may apply. For further information visit ato.gov.au.