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Strategies to rebuild super after early access

If you’ve accessed your super early due to COVID, there are a number of strategies
that can help you get your super back on track when the time is right.


There are three key strategies that could help you boost your retirement savings between now and retirement.

1. Allocate some of your pre-tax salary to super

This may be appropriate for those who have sufficient cashflow to divert some of their pre-tax salary to super (before it hits your wallet for spending). It doesn’t need to be a large amount to start and you can further increase the amount that you contribute in the future once things are back on track.

If, and when, the time is right, you may be able to arrange for your employer to contribute some of your future pretax salary, wages or bonus directly into your super fund— this is called a salary sacrifice contribution. By making regular additional contributions to super, you’re helping build up your account balance again. Don’t be afraid to start small if it is all you can commit—even small incremental amounts add up over time. The sooner you can start making even small contributions, the better. Salary sacrifice contributions are made from your pretax salary which can be a great, disciplined way to save for retirement. Super is also a long term investment, so, the younger you are when you start saving for your retirement, the more time you’ll have to benefit.

Salary sacrifice contributions count towards the concessional contributions cap. Concessional contributions include employer contributions (also known as super guarantee) and personal contributions claimed as a tax deduction. Breaching the cap may lead to additional tax penalties.

Also, salary sacrifice contributions are generally taxed at the concessional rate of up to 15%1 rather than your marginal rate, which could be up to 47%2 . Depending on your circumstances, this strategy could therefore reduce the tax you pay on your salary and wages by up to 32%. Get started with boosting your super.

2. Make a spouse contribution and receive a tax-offset

Members who are in a couple, where one spouse earns less than $40,000 a year and there is capacity to make a super contribution on behalf of a spouse.

If you make an after-tax contribution into your spouse’s super account and they earn less than $40,000 a year, you may be eligible for a tax offset of up to $540. To qualify for the full offset of $540 in a financial year, you need to contribute $3,000 or more into your spouse’s super account and your spouse must earn $37,000 a year or less.

A lower tax offset may be available if you contribute less than $3,000 or your spouse earns more than $37,000 a year but less than $40,000. Spouse contributions can be a great way to grow your super as a couple and to be rewarded via a tax offset for saving for retirement.

A spouse contribution counts towards your spouse’s non concessional contribution cap and must be within this cap to entitle you to the tax offset.

3. Make personal contributions and claim a tax deduction

Unlike salary sacrifice contributions, personal contributions can be made with your take home pay or savings. You can do this regularly or wait until the end of financial year which could provide greater flexibility and planning options if you have irregular income or expenses.

You could make a personal contribution and claim a tax deduction for the amount (turning it into a personal deductible contribution). This could help to reduce your assessable income and manage your tax liability. The contribution will generally be taxed in the fund at the concessional rate of up to 15%4, instead of your marginal tax rate which could be up to 47%5.

Depending on your circumstances, this strategy could result in a tax saving of up to 32% and enable you to increase your super. You could put some or all of these savings towards making even more super contributions in the following year.

These contributions are treated as concessional contributions and count towards your concessional contributions cap. Exceeding your cap may result in significant tax penalties, therefore, it is important you consult your financial adviser or a specialised tax adviser before making any decisions.

Get a Government top up to your super contributions

You may also be eligible to apply for the Government’s co contribution super measure, where the Government may contribute up to a maximum of $500 to the super accounts of people who meet certain criteria.

To be eligible, you must be able to answer yes to all of the following:

  • you’ve made one or more eligible personal super contributions to your super during the financial year
  • you pass the income threshold test and the 10% eligible income test
  • you’re less than 71 years old at the end of the financial year
  • you didn’t hold a temporary visa at any time during the financial year (unless you’re a New Zealand citizen or it was a prescribed visa), and
  • you’ve lodged your tax return for the relevant financial year.

It is also important to note that you’re not entitled to a Government co-contribution for any personal contributions you’ve made that have been allowed as a tax deduction or a contribution made for you by a spouse.

Next steps

Even small, regular contributions can help getting your super savings back on track for retirement. Depending on your cash flow, financial commitments and personal circumstances, there are many ways that you can restore your super balance.



This article has been written and published by Insight Investment Services.

CB Wealth Australian Pty Ltd T/As HH Wealth is a Corporate Authorised Representative (No. 1283595) of Axies Pty Ltd ABN 38 136 704 446 AFSL No 339 384. Chris Holme is an Authorised Representative (No. 1004793) of Axies Pty Ltd ABN 38 136 704 446 AFSL No 339384.

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