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Who is eligible to make super contributions

Section: 2.3

2.3 Who is eligible to make super contributions

A superannuation fund has strict rules set by law for the acceptance of contributions. The rules for regulated superannuation funds to accept various types of contribution are set out in Regulation 7.04 of the Superannuation Industry (Supervision) Act.

Tax File Number (TFN) restrictions on contributions

If a member has not provided their TFN, the superannuation fund provider can only accept employer contributions. All other contributions must be returned to the contributor within 30 days unless the member provides their TFN within that period.

Who is eligible to make super contributions?

Type of Contribution Does the Work Test1 apply? Maximum age at which the contribution can be made
Mandated employer contributions include:
  • SG contributions
No None. Mandated employer contributions for members can be accepted at any time, regardless of age or number of hours worked.
  • SG shortfall components
  • Contributions made under an industrial agreement or award
  • Payments from the ATO Superannuation Holding Accounts Special Account (SHASA)
Non-mandated contributions
Voluntary employer contributions: Yes, the work test1 applies if aged 67 or over at the time of contribution. A person under age 67 can make personal contributions without restriction2 Maximum age is 753
  • Salary sacrifice
Personal:
  • Non-concessional 
  • Personal deductible
  • Small business CGT contributions
Spouse contribution Yes, the work test applies if the spouse is aged 67 or over at the time of contribution. Maximum age is 75
 
From 1 July 2020, contributions can be accepted for a spouse who is aged under 75 (previously the limit was age 70).
 
Downsizer contribution No There is no upper age limit. Member must be 654 or older and meet other eligibility criteria. 

Note 1The Work Test applies if the member is age 67+ at the time the contribution is made (from 1 July 2020). A person meets the Work Test if they are gainfully employed on a part-time basis during an income year, and they have worked at least 40 hours in a period of 30 consecutive days in that financial year.

Gainfully employed means they are employed or self-employed for gain or reward in any occupation or employment which involves remuneration such as salary or wages, in return for personal exertion. This would not generally include income that comes only from passive investments such as dividends, interest, and capital gains. Refer to SISR Regulation 1.03(1)).

Work Test Exemption - From 1 July 2019, individuals who would otherwise be required to meet the work test (i.e. be aged 65 before 1 July 2020 and aged 67 from 1 July 2020) may be able to make personal contributions for 12 months from the end of the financial year in which they last met the work test (for example, a member who retired during the previous financial year).

Eligibility for the Work Test Exemption:

  • The member's total superannuation balance (TSB) must be less than $300,000 at the end of the previous financial year
  • The member must have met the work test in the previous financial year
  • The member cannot have previously used the work test exemption (it is a one-off opportunity)

Note 2  In the 2021 Federal Budget the government announced its intention to remove the work test for those aged 67-74 to allow them to make non-concessional contributions

Note 3 For a member turning 75 years old, contributions must be received no later than 28 days after the end of the month that the member turns 75 years old

Note 4 In the 2021 Federal Budget the government announced its intention to lower the eligibility age for downsizer contribution from 65 years to 60 years.

This technical resource is intended for the use of financial advisers only. It is current as at the date of publication but may be subject to change. This publication has been prepared without taking into account a potential investor's objectives, financial situation, needs or objectives. Before making a recommendation based on this material, you should consider its appropriateness based on the client's objectives, financial situation and needs. Rainmaker Group is not a registered tax agent under the Tax Agent Services Act 2009. Your client should refer to a registered tax agent before relying on information published herein that may impact their tax obligations, liabilities or entitlements.

Last modified: Tuesday, June 22, 2021