Removal of the work test and extension of bring-forward NCCs

By Stuart Sheary, Senior Technical Manager

The Treasury Laws Amendment (Enhancing Superannuation Outcomes for Australians and Helping Australian Businesses Invest) Bill 2021 seeks to extend the non-concessional contribution (NCC) bring forward rule to clients under age 75 from 1 July 2022.    

The Bill also seeks to retain the work test for clients making personal deductible super contributions who are between ages 67 and 75*. This change is in anticipation of the removal of the work test under Superannuation Industry (Supervision) Regulations (SISR).

Extending the bring forward rule to clients under age 75 

Currently only clients less than 67 at any time in the financial year can bring forward up to two years of NCCs (subject to their total super balance). From 1 July 2022, the Bill seeks to extend the NCC bring forward rule to clients 74 or younger at the start of the financial year. Clients turning age 75 in the financial year have until the 28th day of the month following their birthday to make the contribution. After this time, the fund may not accept any voluntary contributions including NCCs.

To maximise total NCCs, some clients who are approaching age 66 choose to delay using the bring-forward amounts until the last year they are eligible. If legislation is passed, these clients may wish to use their NCC bring-forward amount sooner, as this may mean they will have more years following in which they will be able to trigger the bring-forward rule. 

The work test remains for personal deductible contributions

Under this proposal, clients aged between 67-75* will still be required to satisfy the work test or work test exemption to make personal deductible contributions but not to make NCCs or salary sacrifice contributions. 

If as anticipated the removal of the work test is extended to all member contributions (excluding personal deductible contributions), there will be more contribution opportunities for your clients.

Other opportunities to contribute up to age 75*

Small business CGT

Clients who are eligible to make a member contribution and who dispose of a small business may be able to contribute part or all the capital proceeds into super. The small business must be classified as an active asset to qualify for small business CGT concessions. The CGT small business concession contribution does not count towards either the concessional or NCC cap. 

The maximum CGT small business contribution will depend on the small business CGT concession that is satisfied. Under the small business 15-year exemption, up to $1,615,000 (indexed) of the capital proceeds may be contributed into super. Under the small business retirement exemption, up to $500,000 of the assessable gain disregarded under the exemption may be contributed. 

Currently, clients between ages 67 – 75* who sell their business and satisfy one of these small business CGT concessions may not be able to contribute part of the proceeds into super due to failing the work test and work test exemption. Clients who have attained age 75* are not generally eligible to contribute even if they satisfy either the work test or work test exemption. 

Issue – delay in settlement proceeds of disposal of a small business asset

There can be hurdles if your client sells their business in one financial year and receive settlement proceeds in the following financial year. If your client is between ages 67 and 75*and does not satisfy the work test (or work test exemption), they are prevented from making a CGT small business contribution. If the work test is removed from 1 July 2022 many clients between the ages of 67 and 75* who would not otherwise be eligible to contribute due to failing the work test will be able to make a member contribution such as a CGT small business super contribution.

Spouse contributions

Another opportunity which is presented by the removal of the work test for member contributions, is to make spouse contributions. Spouse contributions are included in member contributions under SISR 5.01(1). This may allow a contributing spouse to claim a tax offset of up to $540, subject to eligibility including that the receiving spouse’s income is less than $37,000 for the full offset and less than $40,000 for a partial offset. 

For details on eligibility and what is included in income please see the IOOF TechConnect Strategy Guide - SG11 Spouse Contributions

Foreign super transfer and personal injury contributions

The removal of the work test will also allow clients between ages 67-75* to transfer their foreign super to an Australian super fund or make a personal injury contribution without satisfying the work test or work test exemption. 

For more information on foreign super transfers and personal injury contribution requirements see the IOOF TechConnect Strategy Guides SG08 Foreign pension schemes and SG59 Contributions.


If passed, the Treasury Laws Amendment (Enhancing Superannuation Outcomes for Australians and Helping Australian Businesses Invest) Bill 2021 will present more super contribution strategies for your clients. We will keep you updated as this legislation develops further.

* The time limit is 28 days after the end of the month of their 75th birthday.

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.