Over 67 and under 74? You can now add to your super without working
From 1 July 2022, if you are aged between 67 to 74 years, you will be able to make voluntary personal contributions (and salary sacrificed contributions) without meeting a work test. The work test is currently a minimum of 40 hours in any 30-day period, within the financial year in which the contribution is made.
Any new contributions are subject to the existing contribution caps of $110,000 per annum, as nonconcessional contributions and $27,500 per annum for concessional contributions, which would include salary sacrificed contributions.
This opens the door for those in retirement with lump sums readily available, to go into the tax-free environment of superannuation.
Any existing pension income stream however cannot receive new monies and would need to be ceased. The funds from any existing pension in addition to the new contributions would then be used to commence a brand-new superannuation pension income stream.
There is, however, still a requirement to meet a work test to claim a personal tax deduction for any personal contributions. This becomes less relevant in retirement as generally the need to claim a deduction greatly reduces as the majority of one’s income is paid from superannuation which is tax free and does not count towards the tax-free threshold.
Please call us today if you have funds sitting in an interest-bearing account that could be better utilised via the vehicle of superannuation.