What are the rules regarding late super contributions?

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Terry has been blocked from making a contribution to his super account and wants an explanation of the rules.

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Q. Terry
As our bank’s term deposit interest rate is so low at present, I decided to withdraw $50,000 and contribute it to my super account. The super people advised that they were returning the $50,000 to me as the government wouldn’t allow contributions from me because I hadn’t worked a certain number of hours during the past 12 months. Is this now the government ruling?

A. People aged 65 to 74 must work a minimum of 40 hours in any 30-day period in a financial year in order to keep making contributions to their superannuation. This is known as the work test.

As part of government changes introduced recently, from 1 July last year, Australians aged 65 to 74 with a total superannuation balance below $300,000 have been able to make voluntary contributions for 12 months from the end of the financial year in which they last met the work test.

Total superannuation balances are assessed for eligibility at the start of the financial year following the year in which they last met the work test.

Once eligible, there is no requirement for individuals to remain under the $300,000 balance cap for the duration of the 12-month period.

Existing annual concessional and non-concessional caps ($25,000 and $100,000 respectively) continue to apply to contributions made under the work test exemption.

Individuals are also able to access unused concessional cap space to contribute more than $25,000 under existing concessional cap carry-forward rules during the 12 months.

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Disclaimer: All content on YourLifeChoices website is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a Centrelink Financial Information Services officer, financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.

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Written by Ben



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