Question 1: If I pay $300,000 in after-tax money into my super in one year, how long until I can contribute again?

Question 2: Hi Craig, I am 66 years old and still running my own business. Currently I have $680,000 in my super fund. Can I use the ‘bring forward’ non-concessional cap of $330,000 over three years despite my age? Piers

I will answer these two questions together as they are both in relation to non-concessional (after-tax) contributions and the ‘bring forward’ rule.

From the 2021-22 financial year, the annual non-concessional cap is $110,000.

However, you can ‘bring forward’ future contributions as long as you are age 66 or below on July 1 of that year. Note that if you have already turned 67 at the time of the contribution then you must meet the work test first.

The most you can bring forward is three years and you must have had a total super balance below $1.48 million on the previous June 30 to use the full three years’ amount of $330,000.

If you had a balance of $1.7 million or more, you are not eligible to make any non-concessional contributions. This is shown in the table below.

If you use more than the annual amount of $110,000, then you cannot contribute more than $330,000 over three financial years.

For example, if you make a non-concessional contribution in 2021-22 of $330,000, then you cannot make another non-concessional contribution until 2024-25.

I suggest seeking personalised financial advice and checking your MyGov account to see if you are already in a ‘bring forward’ arrangement. 

Question 3: My partner, 49, is working and earning $182,000 plus super, and a possible bonus of between 10 and 20 per cent a year, while I am 46 and have not earned (since 2006) more than a passive $9000 a year, as we owned an investment property (until we sold it in Feb 2018) and I left work to have our children. 

They have $350,000 in superannuation and I have $40,000. I am currently studying in another field and hope to return to work part-time in 2022 if all works out as hoped. What strategies would you recommend to minimise my partner’s tax?

Your partner can look to maximise their pre-tax superannuation contributions to reduce their income tax.

This can be done via salary sacrifice or via tax-deductible contributions.

Normally the cap on this is $27,500 per year (for 2021-22), but because their super balance is less than $500,000, they can contribute more using the ‘carry forward’ contributions rules which I have previously covered.

What also looks appropriate for your situation would be for your partner to make a spouse contribution into your superannuation fund. This has two benefits:

1. It will boost your super balance
2. Your partner may be able to claim a tax offset as a result.

By making a spouse contribution (after tax) of at least $3000, your partner can claim the maximum tax offset of $540 if both of the following apply:

• Your partner contributes to an eligible super fund of yours (You have to be the spouse, whether married or de facto)
• Your income is $37,000 or less.

Note that the tax offset amount reduces if your income is greater than $37,000 and completely phases out if your income reaches $40,000.

As your partner is a high-income earner, it may be prudent from a tax perspective to hold any investments outside of super in your name as you are on a much lower marginal tax rate.

Minimising tax should not be your only goal, though.

You may want to make other financial goals alongside this, such as saving, spending, earning and investing.

A financial adviser can assist you in determining your long-term financial goals and the best strategies to achieve them.

Question 4: I’m 74 years old. My son-in-law is opening his own business. Can I work as a cleaner in his business and reactivate my super? 

Yes, you can open a new super account at any age (you won’t be able to ‘reactivate’ an old account if closed).

If you earn more than $450 per month, your employer is legally required to pay you the superannuation guarantee on this amount of at least 10 per cent, regardless of age (note for those under 18 then you must also work at least 30 hours per week).

You can make personal pre- or post-contributions to your super account as well, so long as you work at least 40 hours in a consecutive 30-day period.

However, once you turn 75, you can no longer make personal contributions (apart from a ‘downsizer’ contribution), but the fund will still accept any employer SG or mandated contributions.

Craig Sankey is a licensed financial adviser and head of Technical Services & Advice Enablement at Industry Fund Services

Disclaimer: The responses provided are general in nature, and while they are prompted by the questions asked, they have been prepared without taking into consideration all your objectives, financial situation or needs.

Before relying on any of the information, please ensure that you consider the appropriateness of the information for your objectives, financial situation or needs. To the extent that it is permitted by law, no responsibility for errors or omissions is accepted by IFS and its representatives. 

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