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Non-concessional contribution to Super when aged 65

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Newbie

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I retired in 2013 and turned 65 in March 2019.  I recently received a lump sum of $300k as my share of the family inheritance when the home that belonged to my parents was sold.

I have Super with a current balance of around $380k.  After 1st July 2019, Would it be possible to add to my Super the inheritated amount of $300k? 

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Anonymous

Replies 5

Hi @RodMann 

 

As you were under 65 as at the 1 July 2018 and your Total Super Balance  is under $1.4million dollars as at the 30 June 2018you have the ability to make up to three times the annual $100,000 non-concessional contributions cap under the Bring Forward Arrangement and this means you can make up to $300,000 non-concessional contribution over a period of three financial years starting in the current 2019 financial year, provided you trigger the bring forward rule by 30 June 2019.  

 

You can trigger the Bring Forward Rule by making a non-concessional contribution that is over the $100,000 annual cap by 30 June 2019, and once triggered you can make the remaining non-concessional contributions that will bring you up to the  $300,000 max, over the next two financial years, in amounts and at times that you choose.  However on or after 1 July 2019 you will have to meet the work test in order to make any additional contributions up to the max of $300,000, and this is because you are 65 years of age as at 1 July 2019.

 

As an alternative you can just contribute the entire $300,000 in this current 2019 financial year, without having to meet the work test. 

 

However, if you do not trigger the bring forward rule by 30 June 2019 and you leave it until on or after 1 July 2019, then you will be subject to the non-concessional contribution eligibility criteria for persons that are of ages 65 to 74 as at 1 July 2019, and this means you will no longer be able to use the bring forward arrangement, and are restricted to $100,000 non-concessional contribution cap per financial year as well as having to meet the work test.  The information about this is also contained in the links already provided.

 

Hope this helps

 

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Best answer

Anonymous

Replies 5

Hi @RodMann 

 

As you were under 65 as at the 1 July 2018 and your Total Super Balance  is under $1.4million dollars as at the 30 June 2018you have the ability to make up to three times the annual $100,000 non-concessional contributions cap under the Bring Forward Arrangement and this means you can make up to $300,000 non-concessional contribution over a period of three financial years starting in the current 2019 financial year, provided you trigger the bring forward rule by 30 June 2019.  

 

You can trigger the Bring Forward Rule by making a non-concessional contribution that is over the $100,000 annual cap by 30 June 2019, and once triggered you can make the remaining non-concessional contributions that will bring you up to the  $300,000 max, over the next two financial years, in amounts and at times that you choose.  However on or after 1 July 2019 you will have to meet the work test in order to make any additional contributions up to the max of $300,000, and this is because you are 65 years of age as at 1 July 2019.

 

As an alternative you can just contribute the entire $300,000 in this current 2019 financial year, without having to meet the work test. 

 

However, if you do not trigger the bring forward rule by 30 June 2019 and you leave it until on or after 1 July 2019, then you will be subject to the non-concessional contribution eligibility criteria for persons that are of ages 65 to 74 as at 1 July 2019, and this means you will no longer be able to use the bring forward arrangement, and are restricted to $100,000 non-concessional contribution cap per financial year as well as having to meet the work test.  The information about this is also contained in the links already provided.

 

Hope this helps

 

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Newbie

Replies 4

Thanks for the reply.

 

Would the fact that I made a non concessional contribuition to Super of $100k in mid July 2017 influence the amount of future non concessional contribuitions I can make i.e. $300k or $200k (taking into account the 2017 contribuiition)?

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Anonymous

Replies 2

Hi @RodMann 

 

It has absolutely no affect on your ability to make future non-concessional contributions, as you did not go over the $100,000 non-concessional cap so you did not trigger the bring forward arrangement and your Total Super balance was under $1.4million as at the end of that financial year, 30 June 2018.

 

This means you can still take advantage of the bring forward arrangement and make up to $300,000 non-concessional contribution in the 2019 financial year.

 

Just remember that the annual cap for non-concessional conbtributions is per financial year , and you need to be mindfull that your Total Super Balance as at 30 June in the prior financial year also dictates how much you can contribute.

 

Here is a table for annual non-concessional caps (as per prior links):

 

Table 2: non-concessional contribution caps

Financial year      Non-concessional cap       Tax on amounts over cap   

2018–19               $100,000                            47%

2017–18               $100,000                            47%

2016–17               $180,000                            47% (plus 2% budget repair levy)

 

PLEASE NOTE - I have amended my original response !!

 

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Anonymous

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Hi @JodieH 

 

I have just found a draft EM and other in regards to the work test and the bring forward arrangement ....  and here is just one of the proposed changes ..

 

"Proposed regulation changes will provide a one-year exemption from the work test for superannuation contributions to allow certain recent retirees to boost their superannuation balances, provided the individual satisfied the work test in the previous financial year"

 

Im not sure if these proposed changes went through or how they affect the application of either the work test or bring forward arrangement in this person's situation.

 

Also my response does needs to be checked as I think part of it maybe incorrect ... (I know you may have already escalated this)

 

Regards

 

MVF

 

 

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Taxicorn

Replies 0

@Anonymous @RodMann 

 

In February 2019, a number of laws were passed through Parliament.

 

From 1 July 2019, retirees aged between 65 and 74 with a superannuation balance below $300,000 will be allowed to make voluntary super contributions for the first year that they no longer meet the work test requirements.

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ATO Certified

Community Support

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Hi @RodMann,

 

Thanks for getting in touch!

 

We've checked information with a specialist area regarding your query and the information provided by @Anonymous is correct and the follow up information by @macfanboy explains the impact of the laws passed through Parliament in February 2019.

 

If you'd like to receive more guidance or specific information relating to your specific situation, you can write to us to request a private ruling. Private rulings are binding advice from us that explains our view on how the tax law applies to your specific situation. They are free services and we aim to respond within 28 days from receiving your request.

 

Thanks, JodieH.