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Can you contribute to super if you’re longer working full-time?

December 15th, 2020

In recent years, super contribution rules have been relaxed to give members more opportunity to add to super as they grow older. Here’s an overview of how you could keep your super growing as you near retirement and, possibly, afterwards.

Employer contributions

If you’re still working part-time and earning $450 or more per month from a single employer, you’re entitled to the standard 9.5% super guarantee (SG), just like any other worker.

If you’re eligible for the Age Pension but are still working in some capacity, the “Work Bonus” lets you earn up to $300 per fortnight before your pension is reduced.

To make sure you’re receiving all your employer contributions, you can:

  • check your pay slip
  • log in to firstonline and view your transactions, or
  • call us on 1300 360 988 and we’ll check your account for you.

Voluntary contributions and the “Work Test”

Generally, it’s possible to make your own voluntary contributions to super to top up your balance.

However, once you reach age 67, your ability to make these types of contributions (and for First Super to accept them) is tied to whether you’re still working. The Work Test requires you to show proof that you have worked at least 40 hours over 30 consecutive days within the financial year.

Once you’re 75, you can no longer make any extra contributions to super – except for downsizer contributions, which we’ll get to shortly.

Salary Sacrifice and Transition to Retirement (TTR)

If you want to cut down your hours or boost your super but are worried about still affording your current lifestyle, a TTR strategy using salary sacrifice could work for you.

This is where you open a retirement account alongside your super account and start withdrawing funds while also contributing extra, relying on a beneficial tax rate on your contributions to make the arrangement worthwhile.

This plan won’t work for everyone, so before opening a TTR account read more about how it works, then discuss your plans with a First Super Financial Planner, who can advise whether it’s the right move for you*. (The first appointment is at no additional cost to members, so you have nothing to lose.)

Downsizer contributions

If you’ve already fully retired, there is one way you can contribute more to super during your retirement years – by selling your family home and making a downsizer contribution.

Of course, this is not going to be possible – or right – for everyone, but it’s good to know you have this option if it suits you at a future point.

How does it work? You can sell your main home (what the Government calls your “primary residence”) as long as you’ve owned it for at least 10 years. You can then contribute up to $300,000 as an individual or $600,000 as a couple to your super account.

You’ll need to meet eligibility criteria, and bear in mind the assets from the sale will be considered by the Government when they assess (or re-assess) any Age Pension entitlements.

More information and financial support

For more information planning for retirement – or, if you’re already retired, maximising your financial situation – get in touch with us. You can call 1300 360 988 to speak to our Member Services Team or go ahead and book a financial advice appointment online with our Financial Advice Team at firstsuper.com.au/advice-appointment.

*First Super financial planners are authorised representatives of Industry Fund Services Limited (ABN 54 007 016 195, AFSL 232514).