Re-contributing COVID-19 early release payments into your super
Last year the government temporarily changed super laws to let Australians financially impacted by COVID-19 access some of their super early.
According to the Australian Prudential Regulation Authority, super funds received approximately 4.9 million applications under the program and paid out around $37.3 billion in early release payments1.
While these payments provided crucial support to Australians experiencing financial hardship because of COVID-19, they also put a dent in a lot of people’s retirement savings.
Recent changes now make it easier to re-contribute early release amounts back into super and to start getting your retirement savings back on track.
What has changed
From 1 July 2021, if you previously received a COVID-19 early release amount, you can re-contribute up to that amount into your super without it affecting your non-concessional contributions cap.
Non-concessional contributions are any payments you make into super from your after-tax income (your take-home pay) that you don’t claim a tax deduction for.
Currently, you’re allowed to pay up to $110,000 in non-concessional contributions into your super each financial year or up to $330,000 in a three-year period if you're under age 67. This is known as the non-concessional contributions cap. If you exceed this cap, you may pay additional tax.
Because re-contribution amounts are exempt from this cap, you can potentially put more into super without paying additional tax.
How to make a re-contribution
To re-contribute early release payments into your super:
- Make an after-tax contribution into your account
You can make personal contributions from your after-tax salary into your super using BPAY®. Your biller code and your reference number are available in Member Online.
- Fill out and send us a Notice of re-contribution of COVID-19 early release amounts form
For your contribution to be counted as a COVID-19 early release re-contribution, you need to fill out and send us this form before or at the time you make the contribution. If you don’t do this, your contribution will count towards your non-concessional cap.
Re-contributions can be made between 1 July 2021 and 30 June 2030 and can’t exceed the total amount of super accessed under the COVID -19 early release. You can’t claim a re-contribution as a personal super deduction.
Other things to consider
While re-contribution amounts don’t count towards your non-concessional contributions cap, they do count towards your transfer balance cap. This is the cap that applies when you move your super into the retirement phase.
Re-contribution amounts also count towards your total super balance when recalculated to include all your contributions on 30 June at the end of the financial year.
For more information about these changes, see the ATO.
If you’re not sure how this measure affects you and your super, you should consider getting advice.
® Registered to BPAY Pty Ltd ABN 69 079 137 518.
We're giving you this information in good faith. It comes from sources we think are reliable and accurate. However, we can't guarantee it’s right and don't accept any liability relating to the content or any linked external websites.