The Government has introduced the first part of their budget measure to remove the work test for those age 67 to 74. As outlined in our previous blog article ‘Repealing the work test for those aged 67-74 – the first instalment’, Schedule 4 to Treasury Laws Amendment (Enhancing Superannuation Outcomes for Australians and Helping Australian Businesses Invest) Bill 2021 that was tabled in the lower house on 27 October 2021, introduces a new provision to the Income Tax Assessment Act 1997 (ITAA 1997) that will require an individual, aged between 67 to 75, to pass a ‘work test’ if they wish to claim a personal superannuation contribution as an income tax deduction.

This proposed ‘work test’ is similar to the current ‘work test’ in the SIS regulations for acceptance of personal contributions from members aged between 67 and 751, being 40 hours of gainful employment in any 30 consecutive days in the income year. The SIS regulations work test exemption for individuals with a prior total superannuation balance (TSB) of less than $300,000 will also be included in the new ITAA 1997 provision.

Schedule 4 to the Bill also increases the cut-off age from 67 to 75 for the bring forward rule for the non-concessional contribution cap. An issue raised in our previous blog concerned whether an individual approaching age 75 could use the bring forward rule and effectively use their non-concessional cap for income years they will be over 75, when generally a superannuation trustee cannot accept a personal member contribution, unless it’s a downsizer contribution.

Our example was as follows:

Kevin is age 74 in the 2022-23 income year and has a prior 30 June 2022 TSB of $1m. Kevin makes a non-concessional contribution of $330,000 in 2022-23, thus utilising his non-concessional cap from 2023-24 and 2024-25, when his age is 75 and 76. If Kevin made a contribution in either of those income years, the superannuation fund trustee could not accept the contributions, unless they were Downsizer contributions.

The Explanatory Memorandum (EM) to the Bill indicated that the amendments are not intended to enable individuals approaching 75 years of age to bring forward non-concessional contributions from future years (i.e. during which they will be aged 75 years or over). However, the corresponding amendments to the relevant income tax provisions in the Bill did not reflect this.

The SMSF Association has now received confirmation from Treasury that the above example of Kevin will be permissible once the cut-off age has been increased to 75. That is, Kevin would be able to make a maximum non-concessional contribution of $330,000 in 2022-232. In a statement from the SMSF Association, they say:

‘Treasury has confirmed that the amendments, which are currently before Parliament, simply move the current cut-off age for the bring forward rule from needing to be under age 67 to needing to be under age 75 from 1 July 2022. This means an individual aged 74 will be able to access the bring forward rule in the same way an individual aged 66 currently can.’

However, there was concern that when the ‘work test’ was removed from the SIS regulations that there could be amendments to limit the use of the bring forward rule for individuals approaching age 75. This too has been confirmed by Treasury as not being the case. The statement from the SMSF Association further notes that:

‘Importantly, Treasury has confirmed the regulations which will support the amendments currently before Parliament, and which Treasury are hoping will be finalise before the end of this calendar year, will not change this outcome.’

The increase in the cut-off age for the bring forward rule from 67 to 75 is to apply from the 2022-23 income year.

These amendments, once finalised, will provide contribution and estate planning opportunities for those aged between 67 to 75 who currently do not meet the ‘work test’, including:

  • Moving capital held outside superannuation to inside of superannuation;
  • Withdrawal and re-contribution strategy to effectively move the taxable component of superannuation benefits to tax-free component, lessening the potential tax levied on superannuation death benefits paid to non-tax dependants;
  • Bringing forward an individual’s non-concessional cap for years when they are aged 75 or older when generally the superannuation trustee is unable to accept the contribution.


Of course, ensuring the individual does not end up with an excess non-concessional cap amount and being able to utilise the bring forward rule will be dependent upon the individual’s prior 30 June total superannuation balance. Here’s a reminder of the effect of an individual’s prior 30 June total superannuation balance on their non-concessional cap and the bring forward rule:

Total super balance at 30 June prior  Non-concessional cap – year 1  Bring forward period
Under $1.48 million $330,000 2 years
From $1.48 million to < $1.59 million $220,000 1 year
From $1.59 million to < $1.7 million $110,000 No bring forward period
From $1.7 million Nil N/A

The removal of the ‘work test’ will also mean that a superannuation trustee will not be required to return a contribution where the individual has not been gainfully employed during the income year. Individuals will have to take extra care to ensure that they have available non-concessional contributions cap space to avoid an excess non-concessional contribution determination.

Timing of the bring forward rule contribution will be crucial

Whilst the increase to the cut-off age for the bring forward rule will allow an individual, with a total superannuation balance below the relevant threshold, outlined above, to effectively use their non-concessional cap from when they would be aged 75 or more, it will be the timing of the contribution that will be crucial to ensure the superannuation trustee can accept it.

Let’s revisit our example of Kevin.

The superannuation trustee is able to accept the contribution from Kevin as he has made it to the fund prior to 28 days after the end of the month in which he turns 75. Kevin can use the bring forward rule and consequently has a maximum non-concessional cap for 2022-23 of $330,000 as:

1.He was under age 75 at some time in the 2022-23 income year; and
2.His prior 30 June 2022 total superannuation balance was less than $1.48 million.

However, let’s say that Kevin only made a personal contribution of $200,000 in 2022-23 and that he attains age 75 on 31 July 2023. Whilst Kevin has a remaining bring forward period of 2 income years, being 2023-24 and 2024-25 and a remaining bring forward cap amount of $130,000, he must ensure that he utilises the balance of his bring forward cap amount no later than 28 August 2023, being 28 days after the end of the month in which he attains age 75. After this date, the superannuation trustee will not be able to accept a personal contribution from Kevin, unless it was under the Downsizer measure.

So, whilst these amendments and confirmation by Treasury on their application is very much welcomed, care will still be required to ensure compliance both with the contribution acceptance rules under the SIS regulations and the contribution cap rules in the tax provisions.

1.The ‘work test’ in the SIS regulations is proposed to be removed from 1 July 2022
2.Assuming the amendments are passed per the Bill with effect from 1 July 2022

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