Many Australians will unlock their superannuation savings when they hit 65. But, some may realise they don’t have as much as they thought they did and wish to top up their nest egg. There are certain provisions available if you want to grow your super even after you turn 65, or if you haven’t retired yet. These rules vary depending on the type of contributions you want to make.
For example, if you’re still employed, the rules for employer contributions to your super remain the same. You can even make voluntary contributions using salary sacrifice or after-tax contributions, provided you’re under 75 and meet the requirements under the work test and work test exemption.
What are the work test and work test exemption rules?
Created for recent retirees, the work test and work test exemption are criteria you must meet to be eligible to make or receive voluntary contributions toward your super fund. These tests usually apply to people aged between 67 to 74 at the time of the contribution.
- Eligibility for the work test: To meet the work test, you must be employed or self-employed and work for a minimum of 40 hours within 30 consecutive days.
- Eligibility for the work test exemption: To be exempted from the work test rule while making or receiving super contributions, you must meet certain conditions. You must have met the work test criteria in the previous financial year. You shouldn’t be employed or intend to be employed in the financial year the contributions are accessed. Your super balance should be below $300,000 on the 30th of June the previous financial year, and you shouldn’t have made contributions to your super using the work test exemption previously, as you can only use this exemption once.
What type of voluntary contributions can you make after retirement?
1. Contributions made to your spouse
You can make voluntary contributions to your spouse’s super fund, provided they are a low-income earner and meet the work test or are aged under 67.
2. Downsizer contributions
If you’ve recently sold your home or are about to sell your home, you may be able to make downsizer contributions of up to $300,000 ($600,000 combined for a couple) to your superannuation after you reach 65 years. This contribution is made from the proceeds of the sale of your house, which you have owned for at least 10 years and is located in Australia. If you provide your super fund with a form before or while making the contribution, the downsizer contribution won’t be accounted for under the concessional or non-concessional contribution caps. The downsizer contribution counts towards your transfer balance cap of $1.6 million.
How to make super contributions after re-entering the workforce
You may be wondering if you can still work if you have previously told your super fund via a written declaration that you intend to retire. This may apply if you have taken a lump sum super payout or received payments from your super fund periodically via an income stream. The good news is you can still make super contributions again if you choose to re-enter the workforce. However, you will likely be limited in how many hours you can work.
To make superannuation contributions after retirement, you need to start a new fund in the accumulation phase with either your old super fund or a new one. If you’ve declared your retirement in the past, you need to tell your super fund and the Tax Office that your circumstances have changed and you wish to return to work. They will also need to be satisfied that you did intend to retire in the first place, as that was the basis of your super funds being released to you.