Everyone under age 75 can contribute to superannuation but some restrictions apply to young people and people over the age of 65. There are also some maximum contribution caps along their way. These are specified in the section called
"Contribution Caps."
When can superannuation contributions be made?
|
Age * |
Contribution Category |
|||
|
|
Mandated Employer |
|
|
|
|
|
(eg Super Guarantee/Award etc) |
(eg Salary Sacrifice) |
|
Eligible |
|
Under 18 |
ü |
ü |
ü |
ü |
|
18 to 65 |
ü |
ü |
ü |
ü |
|
65 to 70 |
ü |
ü 2 |
ü 2 |
ü 3 |
|
70 to 75 |
ü 1 |
ü 2 |
ü 2 |
û |
|
75 & over |
ü 1 |
û |
û |
û |
Notes:
Foreshadowed Government changes may cause alterations to some of the following.
1. Superannuation Guarantee (SG) ceases for individual's aged 70 or over, but award or industrial agreement obligations could continue.
2. Prior to age 65 no work test applies. Once age 65, contributions can only be made once a person has undertaken gainful employment on at least a part-time basis in the financial year. That is, they have already worked for at least 40 hours in a period of no more than 30 consecutive days during that financial year.
3. The 'contributing' spouse must be a taxpayer and must not be entitled to a tax deduction for the contribution. The recipient spouse does not have to be gainfully employed unless aged between 65 and 70. In that case, the recipient spouse must have already undertaken gainful employment on a part-time basis in that financial year as described in 2 above.
* A super fund's rules may be more restrictive than those allowed by legislation
Other features:
Tax free income after age 60. This can be used to Transit to retirement. (See the section on
Building for retirement.)
Life, disability and salary continuation insurance can be placed inside super.
(See Insurance Inside Super)
You can nominate who will get your super if you die prematurely.
(See Nominating Beneficiaries and also
Wills & Estate issues)
Tax savings. Super is the most tax effective way of saving for your retirement. Salary sacrifice
is a particularly tax effective strategy.