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Self Managed Super Fund (SMSF) Article
Super Contribution Rules

By Tony Negline.

This article may be out of date.

9th February 2005

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Recent feed-back from readers has revealed that there is a lot of confusion about when a super fund trustee can accept contributions.

We're not surprised by this confusion because in the last twelve months there have been quite a few changes to the super contribution rules and it takes time for people to get used to a new set of rules.

Unfortunately our political leaders feel compelled to change the super regulatory environment far too frequently.  In reality no one has enough time to get used to one rule before it is either amended or removed.  In the last ten years there have been 24 changes to the rules that permit super contributions.

Before deciding to invest money into super, it is necessary to look at the whole transaction including tax concessions that may be available for the contributor, the tax treatment of a contribution once a super fund has received it, how long the money must stay in the super system before it can be accessed, the tax treatment that might apply upon the withdrawal of the contribution and any earnings attached to the contribution and finally the Centrelink assessment of those benefits.

In this article we will concentrate on the rules that permit contributions to be made.  In later articles we will focus on the potential tax concessions available for those contributions.

Before 1st July 2004 there were at least six different ways that a person aged under 65 could contribute, or could have contributions made for them, to super.

From July 2004 onwards the government removed all these rules and now anyone aged under 65 can make a contribution to super.  This is a very welcome simplification measure.  There are some important points to note :

Contributions for people aged 65 are another matter.  The rules for these contributions have been significantly amended and from July 2004 onwards there are three age brackets to consider:

Super Guarantee contributions are not allowed.  Industrial Award or Agreement contributions can be made at any time.

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This email is general in nature only and does not constitute or convey specific or professional advice. Legislation changes may occur quickly. Formal advice should be sought before acting in any of the areas discussed. Be aware that the information in these articles may become innaccurate with time. Responsibility is disclaimed for any inaccuracies, errors or omissions. Particular investments are neither invited nor recommended and hence this publication is not "financial product advice" as defined in Section 766B of the above legislation. All expressions of opinion by contributors are published on the basis that they are not to be regarded as expressing the official opinion of any other person or entity unless expressly stated. No responsibility for the accuracy of the opinions or information contained in the contributor's articles is accepted by any other person or entity. Copyright: This publication is copyright. If you wish to reproduce this article you require a license, which can be purchased here, to do so.

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