Super Bill provides super opportunities in 2022 [CPD]

01 April 2022

Money & Life team

Money & Life contributors draw on their diverse range of experience to present you with insights and guidance that will help you manage your financial wellbeing, achieve your lifestyle goals and plan for your financial future.

With yet another raft of super changes now law, 1 July will bring with it a range of strategic advice opportunities for older clients. In some cases, the changes could also flag a need to reconsider recommendations which were intended to be implemented before 30 June.

The recently legislated changes were first announced in the 2021 Federal Budget. For a while there, it looked as though the proposals wouldn’t be passed prior to the slated 1 July commencement date. An early Federal Budget and impending Federal Election threatened yet another end of financial year (EOFY) with uncertainty about prospective super contribution rules.

With the passage of the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Bill 2022, financial planners can now approach the new financial year with clarity.

The changes include:

  • removing the work-test requirement for non-concessional contributions (NCCs) and salary sacrifice contributions;
  • increasing the eligibility age for the NCC bring-forward rule to individuals aged less than 75 at the beginning of the financial year (currently 67);
  • extending eligibility to make downsizer contributions to those aged 60 or over (currently 65);
  • increasing the maximum amount of voluntary contributions made to super that can be released
    under the First Home Super Saver Scheme;
  • removing the $450 income threshold for super guarantee; and
  • changing the way in which exempt current pension income can be calculated for self-managed super funds in certain circumstances.

Below, three of the key super contribution changes are examined in more detail, including the advice opportunities, implementation considerations, and how advice could be impacted in the lead up to 30 June.

Note: One change that missed the cut has garnered almost as much interest as those which have passed. The proposal to provide an opportunity to exit certain legacy pensions was not part of this Bill and at the time of publication, these changes were not yet law.

Removal of work test and bring-forward changes

Removal of work test

Summary of change

The work test will no longer need to be met by individuals aged between 67 and 75 when making:

  • salary sacrifice contributions; and
  • personal contributions.

The work test will still need to be met (or work test exemption applied) to claim a tax deduction for personal contributions. There’s also no change to the requirement that contributions must be received within 28 days after the end of the month in which the person has turned 75.


The work test has been removed from the SIS Regulations, effective 1 July 2022. This means that it will no longer be part of the contribution acceptance rules. As a result, trustees of super funds will not be required to ensure the work test has been met when receiving contributions.

From 1 July, the work test will instead become a requirement under tax law, should a person wish to claim a deduction in respect of a personal contribution that was made when they were aged 67 or over.

Advice tip

Where a client aged 67 or older wishes to make a personal deductible contribution (PDC) where the work test is met, they will need to lodge a Notice of Intent to claim with their super fund and follow the existing process.

Bring-forward NCC eligibility

Summary of change

Individuals aged less than 75 prior to 1 July will be eligible to access the NCC bring-forward arrangement, subject to meeting all relevant eligibility criteria. The work test will also not need to be met.

Currently, the bring-forward rule can only be triggered by a person aged less than 67 prior to 1 July. If a contribution is to be made on or after the person’s 67th birthday at any time during the bring-forward period, the work test needs to have been met for that financial year.

All other eligibility rules will continue to apply, including the total super balance (TSB) limits. Together with the changes to the work test, this could provide significant new contributions opportunities.


It’s not expected there will be a tapering of the bring-forward for those approaching 75. This means that provided a person is aged less than 75 prior to 1 July (and meets the ordinary eligibility criteria, including that relating to TSB), the bring-forward may be triggered (also subject to the below timing requirement).

Note that while the Explanatory Memorandum indicated that the intention is not for a person approaching 75 to access NCC cap space that they wouldn’t otherwise have had available, the legislation does not support this approach. The Government has confirmed (albeit not publicly to this point) that tapering will not exist. We await further confirmation.

Contributions will need to be received no later than 28 days after the month the person turns 75.

Advice tip

Where a person turns 75 in June, they will not be eligible to trigger the bring-forward arrangement in July of the following financial year. Despite having a 28 day window in which to make personal contributions after the month in which they’ve turned 75, this doesn’t change the requirement that the individual must be 74 or under at some time during the financial year to be eligible to trigger the bring-forward rule.

Advice opportunities – work test and bring-forward changes

Advice post-1 July 2022

In addition to being able to increase the total amount invested in super, the changes to the work test and bring-forward eligibility rules will provide a number of strategic opportunities, including:

  • increasing the opportunity for older clients to make and receive spouse contributions, contributions under the small business CGT cap, and transfers from foreign super funds;
  • cashing out and recontributing to a spouse’s account to maximise the total amount they can hold in retirement phase pensions, or to manage TSB (for example, to maintain eligibility for future contributions);
  • enabling family home sale proceeds to be contributed as NCCs to preserve the downsizer contribution opportunity for a future eligible disposal (where for example, they would later be constrained by either age or TSB in relation to NCC eligibility), or to maximise total contributions if sale proceeds exceed downsizer limit;
  • building super savings after the sale of shares, investment properties or other assets1, or receipt of an inheritance;
  • cashing out and recontributing death benefits to facilitate holding death benefit amounts in accumulation, or in a single account-based pension combined with the member’s own benefits;
  • increasing the value of non-estate assets as part of an estate planning strategy; and
  • completing recontribution strategies to manage death benefit tax for non-tax dependants.

The impact on EOFY advice

For some clients, the changes might impact existing contribution strategies between now and 1 July. An example would be where a client is looking to maximise personal contributions in what would otherwise have been the last financial year in which personal contributions could be made, where appropriate, they may instead consider a different contributions strategy. For example, some clients may have planned to contribute up to $330,000 in NCCs in 2021/22 if, under the current rules, it was the final year in which they could make NCCs. As a result of the changes, they may instead consider contributing up to the annual cap of $110,000 this year, and instead,contribute up to $330,000 in 2022/23 to maximise NCCs.

Example: Using recontribution to maximise super investments and simplify outcomes

Tony (72) passed away in January 2022, leaving a super death benefit of $450,000 to his wife Carmela
(70). Carmela has an account-based pension with a current balance of $310,000, and a small accumulation account receiving superannuation guarantee contributions. Carmela also owns two investment properties that are generating around $85,000 per annum in net income. She retired from her part-time job in February after Tony died.

Carmela has no upcoming expenses to consider and maximising super investments is appropriate from a tax perspective. She likes simplicity and would prefer to minimise the number of financial accounts she has. Until the recently legislated changes, she thought this financial year would probably be her final opportunity to contribute to super.

As a result of the changes to the work test and the bring-forward rule, Carmela has a range of options to consider, including:

  • receiving the death benefit as a tax-free cash lump sum;
  • making a PDC before 1 July 2022, utilising any available catch up concessional cap available (if appropriate);
  • contributing up to $110,000 this financial year, and triggering the bring-forward from 1 July, contributing up to $330,000 the following year under the bring-forward rule; or
  • after recontributing the death benefit funds, consolidating the interest with her existing pension and
    commencing a single account-based pension.

Other considerations should include:

  • any estate planning benefits that may arise from isolating tax-free components;
  • tax on earnings at her marginal tax rate if the death benefit is taken in full as a lump sum and contributions staggered over two years;
  • benefit of a partial death benefit lump sum and recontribution of $110,000 in year one, leaving the balance as a death benefit pension in the tax-free retirement phase, and commuting and recontributing the balance the following financial year; and
  • whether a recontribution strategy would reduce her capacity to contribute any funds already held outside of super.

Extension of downsizer contributions to age 60

Summary of change

From 1 July, downsizer contributions will be able to be made by individuals aged 60 or over. In 2021/22 and prior years, downsizer contributions can only be made by a person aged 65 or older at the time the contribution is made. All other eligibility rules will remain unchanged. Note that there is no TSB or age limit for downsizer contributions.


The rules require that contributions are made within 90 days of settlement and eligibility is based on the person’s age at the time of the contribution. This means that individual’s aged 60 to 64, settling on sales of eligible properties from early April, will be within this 90 day window to contribute once the age limit is reduced on 1 July. Note that the new rules don’t require settlements to occur on or after 1 July 2022.

Advice tip

While the ATO can exercise discretion to provide an extension of time for downsizer contributions, it has stated that an extension will not be granted where the only basis for the application relates to the person or their spouse meeting the age requirements.

Depending on circumstances, it may be worth discussing with clients the implications of the date of settlement and the resulting 90 day contribution window in relation to contribution opportunities. Eligible clients may wish to consider taking this into account when making arrangements to sell a qualifying dwelling. Legal guidance will be required, particularly in relation to contract terms.

Key advice opportunities

The reduction in the eligibility age for downsizer contributions may provide a number of opportunities, including:

  • enabling additional contribution opportunities for individuals aged 60 to 64 who are constrained by their TSB in relation to NCCs or have already maximised their NCC cap;
  • increasing total super investments without impacting the NCC cap;
  • increasing the total amount that can be contributed to super from the sale of an eligible dwelling (including NCC cap available);
  • completing a recontribution strategy of up to $630,0002, including NCC bring-forward if eligible;
  • investing sale proceeds from the home in super accumulation to maximise any social security entitlements (while the contributor(s) is under Age Pension age); and
  • where a client has more than one dwelling in respect of which they are likely to satisfy the downsizer rules upon sale, providing advice that best utilises the client’s current and future contribution caps and maximises total contribution opportunities, while considering any CGT implications of a sale.

Advice tips

Even where sale proceeds are required to fund replacement housing or other expenses, a downsizer contribution can still be utilised to implement a recontribution strategy. Downsizer opportunities may also come as the result of a sale where the client isn’t actually downsizing at all (as there are no requirements relating to the application of the sale proceeds).

Clients aged 60 to 64 who will be settling on the sale of an eligible dwelling from early April and who had planned to make NCCs with the sale proceeds, may be able to consider the benefit of making a downsizer contribution instead, or as well as an NCC.

Downsizer NCC or PDC? Choosing the best way to contribute

A client may have more than one dwelling that they intend to sell in the lead up to or during retirement that may qualify for the downsizer rules. Alternatively, it may be the case that the property being disposed of qualifies only for a partial main residence CGT exemption. In these scenarios, consideration should be given to which type of contribution to make to maximise super investments over the longer term, and to manage tax.

Where eligible, consideration may be given to the benefit of contributing sale proceeds as an NCC to preserve the downsizer opportunity for a later time. As downsizer contributions are not subject to an upper age limit or TSB test, holding off on making use of the downsizer contribution cap until the sale of an eligible property in the future may help to maximise total contributions to super, where NCCs would otherwise not be possible3.

The downsizer rules do not require that the dwelling being sold is occupied as the main residence at the time of sale. Provided the other eligibility rules are met, it is sufficient that a property that has been owned for at least 10 years qualifies for at least a partial main residence CGT exemption. As tax deductions cannot be claimed for downsizer contributions, it is important to consider whether, for example, a combination of PDCs and downsizer contributions should be made to manage both CGT and contributions caps.

Advice tip

An invalid downsizer contribution is a personal contribution. This may occur where eligibility, timing or notification requirements4 are not met.

Where an invalid downsizer contribution is made, currently, a trustee needs to determine whether it can accept a personal contribution for the member in accordance with SIS Reg 7.04. This generally relates to whether the work test has been met. A contribution cannot be rejected based on TSB or contribution caps. If the contribution could be accepted by the trustee, it is an NCC.

As the work test will be removed from the SIS Regs and will no longer apply to NCCs in any case, this means that for a member aged up to 755, a failed downsizer contribution will be assessed as an NCC. This may result in an excess NCC where:

  • the person’s TSB precludes them from making an NCC or reduces their NCC cap; or
  • an NCC has already been made during the year, or the person has already triggered the bring-forward rule.

This may also impact the person’s ability to make other planned NCCs.


The changes to super contribution rules will provide a number of new opportunities in 2022 and beyond. In addition to building super, a number of strategic opportunities exist. It may also be important to re-engage with clients whose 2022 EOFY strategies may need to be reviewed.

There may also be some important reasons to engage with clients early in the financial year to review their circumstances in light of the changes. While more changes have been made to the super contribution rules, it’s great to see some of the most common complexities removed from the ‘Simple Super’ system.

Jenneke Mills, IOOF TechConnect.




To answer the following questions, go to the Learn tab at

1. Which of the following is correct regarding changes to the work test?

  1. The work test changes are still only proposals.
  2. Legislation has passed to give effect to the removal of the work test for personal contributions and salary sacrifice contributions.
  3. From 1 July 2022, the removal of the work test will enable all individuals aged 67 or over to make personal contributions.
  4. From 1 July 2022, a work test will apply for eligibility to claim a tax deduction for personal contributions if 67 to 75, and the work test for personal contributions and salary sacrifice will be removed.


2. Jenny (62) is considering selling her home and moving into a smaller apartment that best suits her lifestyle needs. She would like to contribute some of the proceeds of the sale into her super fund. The new downsizer rules will enable:

  1. Individuals aged 60 or older to contribute to super for settlements occurring from 1 July.
  2. Individuals (but not spouses if they didn’t hold legal title) aged 60 or older to contribute to super for settlements occurring from 1 July.
  3. Individuals and their partners aged 60 or older to make downsizer contributions from 1 July, when they are within 90 days of settlement.
  4. Answer C, and if a person needs an extension of time to meet the contribution timing and age requirements, the ATO will grant an extension.


3. The changes to the bring-forward rules will:

  1. Increase the eligibility age for bring-forward NCCs to less than 75 prior to 1 July, with other contribution acceptance rules including TSB still applying.
  2. Remove the upper age limit that currently applies to NCCs.
  3. Mean that people aged 67 to 75 will be able to trigger the bring-forward rule, and only the annual cap of $110,000 will be available thereafter.
  4. Remove both the work test and TSB limits for those aged 67 to 75.


4. John (68) retired earlier in the current financial year. He has $400,000 he wishes to contribute to super, which includes proceeds from the sale of shares. His super balance is currently $390,000. He is planning to sell a property that qualifies for a partial main residence exemption in 2022/23. Which of the below strategies might provide a preferable outcome for John?

  1. Contribute $330,000 as an NCC and $10,000 as a PDC to get John’s funds into a tax-free retirement phase pension as soon as possible.
  2. Contribute $110,000 as an NCC this financial year, and trigger the bring-forward from 1 July to contribute the balance, to maximise the total contributions to super.
  3. To preserve John’s entitlement to catch up concessional contributions next financial year to help manage the CGT on the sale of his investment property via PDCs, and ensure that any contributions made in 2021/22 don’t cause John’s TSB to exceed $500,000 on 30 June. Contribute the balance under the bring-forward rule next financial year.
  4. John could make a combination of PDCs and NCCs in 2021/22, including under the catch up CC rules (if eligible) to manage CGT. John could contribute up to $110,000 this financial year, and wait until after 1 July 2022 to trigger the bring-forward, to maximise total contributions.


5. Changes to the work test mean that:

  1. Super trustees will only need to qualify that the work test has been met if the person lodged a Notice of Intention to claim a deduction.
  2. Super trustees will no longer have any obligation to qualify that the work test has been met. The work test will be an eligibility requirement under tax law to claim a deduction for a personal contribution if aged 67-75 at the time the contribution is made.
  3. There will no longer be any requirement to lodge a Notice of Intent to the fund, as notification requirements will become an ATO responsibility.
  4. Answers B and C are correct.



  1. A PDC under the catch-up rules may provide a favourable tax outcome, subject to cap limits, TSB limits and work-test requirements.
  2. Based on contribution caps in 2022/23, and assuming the person is eligible for a three year bring-forward.
  3. Downsizer contributions can only be made with sale proceeds received from the sale of a single qualifying dwelling, under a single contract of sale. Any unused downsizer cap cannot be used in relation to future disposals.
  4. The Downsizer contribution into super form must be completed and lodged with the trustee at the same time or before the contribution is made.
  5. Contributions made later than 28 days after the month the person has turned 75 cannot be accepted as personal contributions.

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