Superannuation
Can I contribute to superannuation?
There are three "hurdles" that need to be satisfied before a superannuation fund can accept contributions. From 1 July 2007, these rules are.
1. Work Test
Age |
Rules |
Under age 65 |
Anyone in this age bracket is eligible to contribute to superannuation regardless of their work situation. |
65 to 74 |
Contributions can be accepted during the financial year in which they are made; if: |
Spouse |
The receiving spouse is less than 65, or if aged between 65 and 69 the person is gainfully employed. |
* Gainfully employed means the person has worked at least 40 hours in a period of not more than 30 consecutive days in that financial year.
# Mandated employer contributions include the superannuation guarantee (up to age 70) or contributions required under an agreement or award.
2. Contribution limits
a. Concessional (employer SG and salary sacrifice) contributions of up to $25,000 a year can be made on your behalf before any additional tax is payable. However, a 5-year transition period applies from 2007-08 which allows people aged 50 and over to make up to $50,000 in concessional contributions in that year without being subject to additional tax. Concessional contributions in excess of the cap in any financial year will be subject to an additional 31.5% tax on the amount that exceeds the cap.
b. Non-concessional (personal after-tax) contributions cannot be accepted by a fund if they exceed:
- $450,000 where the member is aged 64 or less at 1 July in the financial year
- $150,000 where the member is aged from 65 to less than 75 at 1 July in the financial year.
While there are some exceptions, depending on their nature, non-concessional contributions exceeding these caps must be rejected and returned to the person making the contribution.
3. TFN test
Superannuation funds can only accept non-concessional contributions if the member has quoted their tax file number (TFN). If a TFN has not been quoted, contributions may be subject to an additional tax.