Avoid a super contributions trap

Let’s clear up some common misconceptions about super contributions pre- and post-65.

Summary: Retired people aged under 65 can still generally make super contributions. Those who are retired and aged over 65 can’t contribute unless they meet the “work test”, which involves working a minimum of 40 hours during a period of 30 consecutive days. Those aged over 65 and still working will continue to be paid the Superannuation Guarantee and can continue to make salary sacrifice contributions up to age 75.

Key take-out: After age 65, it’s not possible to use the pull-forward provisions for non-concessional contributions, so it can be important to time those final NCCs.

Key beneficiaries: SMSF trustees and superannuation accountholders. Category: Superannuation.


Getting money into super can be confusing, particularly for those at, or getting toward, the end of your working life.

Turning 65 is when getting access to your super is easy. But putting money into super becomes more difficult. But not impossible, under the right circumstances.

There are multiple overlapping regulations regarding age, barriers in regards to the work test and rules regarding whether or not you’re an employee or self-employed.

Today, let’s go through some of the common misconceptions regarding contributions near the end of your working life.

I will be mostly referring to the two main types of contributions, being concessional contributions (CCs) and non-concessional contributions (NCCs). Currently, the CC cap is $35,000 for those aged 49 or over on June 30, 2015 and $30,000 for those younger than that.

The NCC limit is $180,000 a year, with the ability for those 65 or under to bring forward three years of contributions at once, though there can be some tricks to this (see below).

Myth: I’ve retired – I can’t contribute

If you’re under 65, that’s simply incorrect. Even if you retired at age 50, there are few restrictions on being able to make contributions until you’re 65.

For those who do retire early, because of significant investment income, for example, making super contributions rather than paying full marginal tax rates, is part of the strategy of easing into the eventual super pension and can add some cream to your super balance.

If you’re under 65, you can still generally make full CC and NCC contributions. When you get very close to age 65, then there are other considerations that you need to be aware of (see below), particularly in regards to timing and the three-year pull-forward rule.

I’m over 65 and “officially” retired – what contributions can my fund receive?

If you’re “retired” and over 65, then you can’t contribute … unless you meet the “work test”.

It’s okay. Many people come out of retirement for this purpose, so they can contribute more to super.

Many, particularly the self-employed who might ease themselves out of a business over many years, will want to continue to make contributions after they’ve stopped working full-time.

The work test involves working a minimum of 40 hours during a period of 30 consecutive days. Passing the work test in one 30-day period will allow you to make your CC and NCC contributions for the entire financial year.

The work test requires “gainful employment”. Generally, most legitimate employment is going to be accepted. If in doubt, check with your SMSF’s accountant or your personal accountant. It can include a wide range of situations, including babysitting and working as a cleaner. Volunteer work does not count towards the work test.

It needs to pass the smell test. Make sufficient notes of your “gainful employment” in case you’re audited.

I’m over 65 and still legitimately working – what contributions can I make?

There is no longer an age limit on employer-mandated superannuation contributions. So, the Superannuation Guarantee will continue to be paid so long as you’re employed and earning in excess of $450 a month, at any age.

But it’s not the same for all other contributions. If you’re still employed, you can continue to make “member contributions” and “employer non-mandated contributions”, if you meet the work test, up until age 75. That is, when it comes to extra contributions, you can continue to make contributions you intend to claim a tax deduction for (for the self-employed), or salary sacrifice contributions (for employees) up to 75 if you pass the work test.

For those turning 75, any contribution needs to be made within 28 days after the end of the month in which you turn 75. So, if you turn 75 on February 15, then you have until March 28 for those contributions to be made.

Do non-concessional contributions stop at 65?

No, they don’t. But each and every year, you have to pass the work test. And there is strictly no ability to use the pull-forward provisions for NCCs after age 65.

It can be important, therefore, to time those final NCCs to super. If you are under 65 at any stage during a financial year, then you can use the pull-forward rule to make extra NCCs to super.

So, if you turn 65 on January 1, 2016, you could potentially make up to $540,000 of NCCs in FY16. Make sure that you are aware, however, of what contributions you have made in previous financial years. If you have previously tripped the three-year pull forward rule, by exceeding the $180,000 annual cap, then you will have to work within those limits from previous years. (And if that was tripped in the FY13 or FY14 year, then you will be working with a pull-forward limit of $450,000, not $540,000).

This might mean that it is worthwhile, at age 63 and 64, to put in only $180,000 each year, so that you can put in the whole $540,000 in the year that you turn 65 (but before you actually do turn 65).


The information contained in this column should be treated as general advice only. It has not taken anyone’s specific circumstances into account. If you are considering a strategy such as those mentioned here, you are strongly advised to consult your adviser/s, as some of the strategies used in these columns are extremely complex and require high-level technical compliance.

Bruce Brammall is managing director of Bruce Brammall Financial. E: bruce@brucebrammallfinancial.com.au. Bruce’s new book, Mortgages Made Easy, is available now.