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Re: Super contributions when retired

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NT
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Hi there. I am having trouble finding answers to the following.

We have a SMSF and my wife will be 65 on the 1 of August 2020. She is retired and will not be working. She is under the contributions cap of 1.6m and would like to contribute $300,000 using the bring forward rule. Can she do this towards the end of the 2020/2021 year. We are confused as to whether she has to satisfy a work test. She will still be 64 at the start of the year but be 65 when she wishes to make the contribution. All responses appreciated.

NT

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ATO Certified

Enthusiast Super Specialist

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Hi @NT ,

 

Your wife is eligible to make contributions if she is age 64 or younger, regardless of whether she is working or not. Once she turns 65, she must satisfy the work test.  This means she must have worked at least 40 hours during a consecutive 30-day period in the financial year she wants to make the contribution.

However, she may be exempt from the work test if she:

  • Met the work test in the previous financial year; and
  • Has a total superannuation balance below $300,000 at 30 June of the previous financial year; and
  • Has not made or received a work test exempt contribution in any previous financial year.

 

You can find the ATO’s definitions on their website under work test and work test exemption.

The other exception to make contributions is for Downsizer contributions. There’s more information about this on the ATO’s Downsizing contributions into superannuation page.

Contribution caps

If you’re under age 65 you can 'bring forward' up to three times the amount of the after-tax contribution cap – so up to $300,000. However, if you turn 65 during the financial year, you will need to meet the work test to contribute on, or after, your 65th birthday. Account balance conditions apply if you have more than $1.4 million in super. There’s more information on the ATO’s Contribution Caps page.

 

I hope this information has been helpful. If you require further information you may wish to have a look at QSuper’s Working in Retirement and Super contribution caps pages.

 

Thanks,

Hailey

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Devotee Registered Tax Practitioner

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 65 on the 1 of August 2020. She is retired and will not be working.

 

This means:

1.  $ 300K can be contributed up to 30/06/2021, provided that bring forward has not been triggered in an earlier year, and total super balance at year start is under $ 1.4 M, but

2.  Once past 31/07/2020, no contributions allowed unless work test passed first  =  at least 40 hours in 30 days.

 

Highlighted

Best answer

ATO Certified

Enthusiast Super Specialist

Replies 0

Hi @NT ,

 

Your wife is eligible to make contributions if she is age 64 or younger, regardless of whether she is working or not. Once she turns 65, she must satisfy the work test.  This means she must have worked at least 40 hours during a consecutive 30-day period in the financial year she wants to make the contribution.

However, she may be exempt from the work test if she:

  • Met the work test in the previous financial year; and
  • Has a total superannuation balance below $300,000 at 30 June of the previous financial year; and
  • Has not made or received a work test exempt contribution in any previous financial year.

 

You can find the ATO’s definitions on their website under work test and work test exemption.

The other exception to make contributions is for Downsizer contributions. There’s more information about this on the ATO’s Downsizing contributions into superannuation page.

Contribution caps

If you’re under age 65 you can 'bring forward' up to three times the amount of the after-tax contribution cap – so up to $300,000. However, if you turn 65 during the financial year, you will need to meet the work test to contribute on, or after, your 65th birthday. Account balance conditions apply if you have more than $1.4 million in super. There’s more information on the ATO’s Contribution Caps page.

 

I hope this information has been helpful. If you require further information you may wish to have a look at QSuper’s Working in Retirement and Super contribution caps pages.

 

Thanks,

Hailey

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