In March 2020, the government allowed early access to superannuation savings for people affected by Coronavirus (COVID-19).  Individuals were able to access $10,000 before 1 July 2020 and another $10,000 between 1 July 2020 and 31 December 2020.

According to data released by the ATO, 4.78M applications were received and $37.8 billion was paid out1.  With data from Australian Prudential Regulation Authority indicating that individuals aged under 45 had the greatest take up rates of the early release payments2.

Whilst these payments were designed to provide support to individuals that were financially impacted by the pandemic, they also meant that those individuals now have reduced retirement savings.

There have now been changes made to super laws to aim to help you re-contribute COVID-19 early release payments back into super and boost your retirement savings.

Under these changes, if you are eligible, you can now make a re-contribution up to the amount you accessed through the COVID-19 early release scheme without affecting your non-concessional contributions cap.

Non-concessional contributions are contributions you make after tax, they can also be known as voluntary contributions.  From 1 July 2021 the non-concessional contribution cap is $110,000 per year.  Note:  your non-concessional contributions cap can be, higher if you use a bring-forward arrangement (see below), or nil if your Total Superannuation Balance is greater than or equal to the transfer balance cap ($1.7 million in 2022–23).

Under the three-year bring-forward arrangements for non-concessional contributions, provided you are under 75 years of age you can contribute up to three times the cap (generally $330,000) at once or at any time during a three-year period.  If you exceed this cap, you may pay additional tax. For more information on the bring forward arrangements visit the ATO website.

Re-contributions of the COVID-19 early release of superannuation can be made between 1 July 2021 and 30 June 2030.

If you choose to recontribute your early release payment back into super you must use the Notice of re-contribution of COVID-19 early release amounts (NAT 75394) form and submit this form to your chosen super fund before or at the time you make your contribution.

If you do not complete the form, then the payment will be treated as a non-concessional contribution and be counted towards your non-concessional contribution cap.

Other considerations

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.

These recontributions will also count towards your total super balance when it is recalculated to include all your contributions on 30 June at the end of the financial year.

You cannot claim re-contribution amounts as a personal deduction on your income tax return.

Age limits on member voluntary contributions continue to apply.

More information

For more information about these changes, see the ATO website.

For more information on how to boost your super savings see our article on easy ways to grow your super.

If you’re not sure how this measure affects you and your super, you should consider getting advice.

Issued by Diversa Trustees Limited (ABN 49 006 421 638), (AFSL No 235153).

This article is general advice only and does not take into consideration your personal objectives, financial situation or particular needs. You should consider whether the information is appropriate to your needs, and where appropriate, seek professional advice from a financial adviser.

1. ATO – COVID19 early release of super report infographic

2. APRA – The superannuation Early Release Scheme: Insights from APRA’s Pandemic Data Collection