Superannuation Contributions

Superannuation laws have become more flexible in recent years, making it easier for older Australians to add to their superannuation later in life. Here’s a summary of the key points about making super contributions.

Types of Super Contributions
There are two main types of contributions: concessional and non-concessional.

1. Concessional contributions: These are made before tax and generally taxed at 15% within your super fund. They include the compulsory employer contributions (superannuation guarantee payments), salary sacrifice contributions, and tax-deductible personal contributions. For 2024/25, the cap on concessional contributions is $30,000 per year.
2. Non-concessional contributions: These are voluntary contributions made from your after-tax income, like money from your bank account or savings. You’ve already paid tax on these funds, so they aren’t taxed again within your super fund. The annual limit for non-concessional contributions is $120,000 for 2024/25.

Super Contributions for Those Under 75
If you’re under 75, you can still make or receive several types of super contributions, including:

• Compulsory employer contributions
• Salary sacrifice
• After-tax personal contributions
• Contributions from a spouse
• Downsizer contributions (from selling your home)
• Personal tax-deductible contributions

Work Test Rule Update
From age 67, the "work test" or a "work test exemption" applies if you want to make tax-deductible personal contributions. The work test requires you to work at least 40 hours over a consecutive 30-day period in the financial year. Since July 2022, this test only applies to tax-deductible contributions. You can still make other contributions without meeting the work test, so being retired doesn’t prevent you from adding to your super.

If you don't meet the work test, you might still qualify for a one-time "work test exemption" if your super balance was below $300,000 on 30 June of the previous financial year and you met the work test in the last financial year. This allows you to make tax-deductible contributions.

Super Contributions for Those Over 75
Once you turn 75, most super contributions are no longer allowed. The only exceptions are compulsory employer contributions (if you're still working) and downsizer contributions. However, if you’re about to turn 75, you have until 28 days after the month you turn 75 to make or receive other contributions. For example, if your 75th birthday is in October, you have until 28 November to make contributions.

Final Thoughts
Recent changes to super rules mean that people in their 60s and 70s can continue to add to their super, whether they’re working or retired. This provides more opportunities to boost your retirement savings.