The new superannuation contribution rules and limits that could supersize your nest egg

With less than two weeks to go until the end of the financial year, long-awaited changes to superannuation contribution rules for seniors have finally passed through Parliament. Bring-forward rules have now been extended to people aged up to 67, which means a retired couple who tick all the boxes and have their ducks aligned could contribute up to $1.46 million in the next two weeks. Craig Day, head of technical services with Colonial First State, said many people would be breathing a sigh of relief. “This is good news as it provides more opportunities for people to make non-concessional contributions later in life,” Mr Day said. “In addition, it provides certainty that contributions made in the hope that the legislation would be passed will be assessed under the new rules.” The new rules centre around other changes which broadly align key superannuation ages with the future age pension eligibility age of 67. Once the Bill receives royal assent, anyone can make up to three years’ worth of the maximum non-concessional contribution if they are under the age of 67, and not exceed contribution caps which limit the amount that can be injected. The other new proviso is that members can’t make contributions that cause them to exceed transfer balance cap limits which currently sit at $1.6m and increase to $1.7m on July 1. Non-concessional contributions are payments made to a super fund where no tax deduction is claimed. Unlike a concessional contribution where a contributions tax of at least 15 per cent applies, no tax is deducted from non-concessional contribution, meaning the full amount is invested. Under the bring-forward rule, a member can “bring forward” up to three years’ worth of contributions and make one large contribution in a single year. The current non-concessional contribution cap is $100,000 a year, so a member making full use of the rule can contribute up to $300,000. And because that annual limit rises to $110,000 on July 1, waiting two weeks would allow you to bring forward three lots of $110,000 — or $330,000. Assuming you are still aged under 67, you could even combine that new limit with a $100,000 contribution before June 30 this year, meaning a grand total of $430,000 over the next couple of weeks. And if your ducks really line up and you have sold the family home in the past three months, you could each also make use of the $300,000 per-person super downsizer contribution. All up, that is a potential combined contribution of up to $1.46 million. Royal assent usually occurs a few days after Bills are passed but that still leaves you with time to get the money into your fund by June 30. The new laws also include changes that “staple” an existing superannuation fund to employees who change jobs.