New super opportunities from 1 July 2022

By Jenneke Mills, Manager - Adviser Technical Support

Significant advice opportunities have been created, particularly for older clients, as a result of the passing of 2021 Federal Budget super proposals. We summarise some of the changes to help you navigate the new rules, as well as highlight key advice opportunities to maximise client outcomes in 2022 and beyond.


Legislation has finally been passed and received Royal Assent to give effect to several of the key super changes proposed in the 2021 Federal Budget.

The changes provide significant strategic advice opportunities from 1 July 2022, particularly in relation to older clients and super contribution strategies. The changes include1:

  • removal of the work-test requirement for non-concessional contributions (NCCs) and salary sacrifice contributions, for individuals aged between 67 and 752
  • extending eligibility to make NCCs under the bring-forward rule to individuals aged under 75 at the beginning of the financial year
  • extending eligibility to make downsizer contributions to those age 60 or over 
  • removal of the minimum income threshold of $450 per month for super guarantee support, and
  • an increase to the maximum amount of voluntary contributions made to super that can be released under the First Home Super Saver Scheme (FHSSS).

The amendments may provide a range of new advice opportunities for clients who thought the super door was permanently closed to them. The strategic opportunities surpass simply boosting an individual’s super balance. 

In this article, we explain advice opportunities resulting from three of the key measures, that may benefit your clients.

Removal of the work test from 1 July 2022

The work test will no longer need to be met by individuals aged between 67 and 753 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. 

Important note: To give effect to this change, the work test will be removed as a part of the contribution acceptance rules which currently sit within Superannuation Industry Supervision Regulations 1994. At the time of publication, the regulations had not yet been amended, however it is expected that this will occur over the coming weeks. Once the work test is removed from the regulations a super trustee will no longer have any obligation to confirm whether or not an individual has met the work test before accepting a contribution.

The legislation that has been passed introduces a work test as part of the eligibility requirements under tax law for personal deductible contributions. From 1 July, the work test will need to be met to be eligible to claim a tax deduction for a personal contribution, where the contribution was made on or after the person’s 67th birthday. 

Changes to bring-forward NCC eligibility from 1 July 2022

Individuals aged less than 75 at the prior 1 July will be eligible to access the NCC bring forward arrangement, subject to meeting all relevant eligibility criteria.

Advice tips
  • There is no expected tapering of the bring-forward for those approaching 75. This means that provided a person is aged less than 75 on the prior 1 July (and meets the ordinary eligibility criteria, including that relating to total super balance) the bring-forward may be triggered (subject to the below timing requirement). While the explanatory memorandum may have been interpreted that the full bring-forward was not intended to be available to those approaching age 75, the legislation does not support this. It is understood that the Government have confirmed (albeit not publicly) that tapering will not exist.
  • Contributions will need to be received no later than 28 days after the month the person turns 75. However, where a person turns 75 in June, this will not permit them to trigger the bring-forward arrangement in July 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.

Key advice opportunities - work test and NCC changes

Changes to the work test rules and bring-forward eligibility may provide a number of advice opportunities, including:
  • an increased 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 recontribute to a spouse’s account to maximise their combined Transfer Balance Account (TBA), or to manage Total Super Balance (TSB)
  • contributing family home sale proceeds to super as NCCs to preserve the downsizer contribution opportunity for a future eligible disposal, or to maximise total contributions if sale proceeds exceed downsizer limit
  • building super savings after the sale of shares, investment properties or other assets,4 or receipt of an inheritance
  • recontributing death benefits to facilitate holding funds in accumulation, or in a single 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.

Using recontribution to maximise super investments and simplify death benefit outcomes

Tony (72) passes away in August 2022 leaving a super death benefit of $400,000 to his wife Carmela (70). Carmela has an account-based pension with a current balance of $300,000. Carmela also owns two investment properties which are generating around $65,000 pa in net income. 

Carmela has no upcoming expenses for which a lump sum is required, 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. As a result of the changes to the work test and the bring-forward rule, Carmela could:

  • receive the $400,000 death benefit as a tax-free cash lump sum
  • recontribute up to $330,000 as an NCC (or $110,000 in the first year followed by up to $330,000 the following year under the bring-forward rule), and 
  • either hold the funds in accumulation or consolidate the interest with her existing pension and commence 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 full amount is commuted and contributions staggered over two years
  • benefit of a partial death benefit commutation 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 funds already outside of super.

Extension of downsizer contributions to age 60 from 1 July 2022

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 65 or older at the time of the contribution.

Key advice opportunities

Reducing the eligibility age for downsizer contributions may provide a number of opportunities to clients, including:

  • 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).
  • complete a recontribution strategy of up to $630,0005, including an 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).

Where a client has more than one dwelling in respect of which they are likely to satisfy the downsizer rules upon sale, there is also an opportunity to provide 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

Settlement date

  • The rules require that contributions are made within 90 days of settlement. Eligibility is based on the person’s age at the time of the contribution.
  • Depending on circumstances, it may be worth discussing with clients the implications of the date of settlement 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. It may be appropriate to discuss the timing of settlement and the impact on eligibility to make a downsizer contribution based on their age.


The new financial year will bring new and exciting super opportunities for many of your clients. In particular many older clients, who were previously unable to contribute to super, will now have the opportunity to build more wealth in super.


1 The Bill also included changes to the way in which exempt current pension income is calculated when an SMSF has had both accumulation and retirement phase interest for part, but not all of the year. This change applies for the 2021-22 financial year onwards.
2 Contributions must be received within 28 days after the month in which the member turns 75. Regulations will need to also be amended for this change to formally become law. See page 2 for more information.
3 Contributions will need to be received no later than 28 days after the month the person turns 75.
4 A personal deductible contribution (PDC) under the catch-up rules may provide a favourable tax outcome, subject to cap limits, total super balance limits, and work-test requirements. 
5 Based on contribution caps in 2022/23, and assuming the person is eligible for a 3 year bring-forward.

More information

If you have any questions, or would like more information, please contact the IOOF TechConnect team on 1300 650 414.

The information in this section of the website is intended for financial advisers only and is not to be distributed to clients. It has been prepared on behalf of Australian Executor Trustees Limited ABN 84 007 869 794 AFSL 240023, IOOF Investment Management Limited ABN 53 006 695 021 AFSL 230524, IOOF Investment Services Ltd ABN 80 007 350 405, AFSL 230703 and IOOF Ltd ABN 21 087 649 625 AFSL 230522 based on information that is believed to be accurate and reliable at the time of publication.