Contributing extra to your super
The amount you can contribute to your super each financial year before paying extra tax is generally capped. However, a couple of special rules can help you extend those caps.
How to re-contribute early release payments
2020 was a difficult year for many Australians. Over 3.5 million people accessed their super via the government’s early withdrawal scheme.
If you withdrew money from your super through the government’s COVID-19 early release scheme and have found you didn’t end up needing some or all of it, the ATO will now allow you to re-contribute what you withdrew back to your super without penalty.
These contributions:
- will not count towards your non-concessional contributions cap
- can be made between 1 July 2021 and 30 June 2030
- cannot exceed the total amount of super you accessed under the COVID -19 early release; and
- cannot be claimed as a personal superannuation deduction
Case studies
Here are a few examples of how re-contributing can work, via the ATO:
Chloe
Chloe accessed $20,000 through COVID-19 early release of superannuation.
Chloe has decided to make a personal contribution of $10,000 into her super.
Chloe’s non-concessional contributions cap for the financial year is $110,000 and as she will not be exceeding this amount, decides to not treat this amount as a re-contribution of a COVID-19 early release amount.
As Chloe will not exceed her non-concessional contribution cap this year there is no need for her to complete the COVID-19 re-contribution form.
Scott
Scott accessed $10,000 through COVID-19 early release of superannuation.
Scott has decided to make a personal contribution of $120,000 into his super.
Scott’s non-concessional contributions cap for the financial year is $110,000 and as he will be in excess of his non-concessional contributions cap, Scott decides to treat $10,000 as a re-contribution of COVID-19 early release amounts so that he will not be in excess.
Tessa
Tessa accessed $20,000 through COVID-19 early release of superannuation.
Tessa has decided to make a personal contribution into her super of $10,000.
Tessa has decided to claim a personal tax deduction for her contribution and as such is not eligible to treat the contributions as a recontribution of COVID-19 early release amounts.
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