Recontribution of COVID-19 early release payments
Around 3.5 million Australians accessed their super early to help alleviate financial stress caused by COVID-19 restrictions and job losses, including more than 10,000 Media Super members.
Unfortunately, withdrawing some of your super early has impacted your retirement balance.
The recontribution of COVID-19 early release amounts into superannuation measure could help rebuild the balance you withdrew, without this counting towards your annual after-tax contributions cap.
How it works
The recontribution measure allows you to recontribute to your super up to the amount you withdrew early in 2020. These recontributions can be made between 1 July 2021 and 30 June 2030.
Normally, any after-tax contributions you make to your super that exceed the after-tax contributions cap (currently $110,000 p.a.) would incur tax penalties. However, the measure ensures any after-tax contributions you make up to the balance you withdrew early won’t count towards the yearly cap.
If you’ve decided to recontribute the balance you withdrew and are nearing your annual after-tax contributions cap, you can choose to access the measure by completing the ATO’s approved form. You must send us this form before or at the time you make your contribution.
If you’re making recontributions but aren’t going to exceed your annual cap, it is not necessary to complete the recontribution form but the amount will count towards your after-tax contribution cap. You should consider whether this is right for your situation and may want to consult a financial adviser or tax agent.
The recontribution will count towards your transfer balance cap when you retire and your overall super balance when it’s recalculated at the end of the financial year.
Visit the ATO’s Recontribution of COVID-19 early release superannuation amounts page for more information.
Who can make recontributions?
You will be eligible to make a recontribution if you can answer yes to all the below:
- You accessed superannuation amounts through the COVID-19 early release of super program
- The total amount, including any previous COVID-19 recontributions, you’re recontributing is equal to or less than the total amount you accessed through COVID-19 early release
- You provide the approved form notifying your fund of the recontribution on or before the time when the contribution is made
- You recontribute the amounts to your fund between 1 July 2021 and 30 June 2030
- You aren’t claiming a deduction in your income tax return for amounts you recontribute
How much can you recontribute?
If you meet the eligibility criteria, you can recontribute up to the amount you withdrew early. You can make multiple recontributions – either in a single year or in multiple years – but their combined total must not exceed the amount you withdrew early.
Chloe accessed $20,000 through COVID-19 early release of superannuation.
Chloe has decided to make a personal contribution of $10,000 into her super.
Chloe's after-tax (non-concessional) contributions cap for the financial year is $110,000 and as she will not be exceeding this amount, decides to not treat this amount as a re-contribution of a COVID-19 early release amount.
As Chloe will not exceed her after-tax contribution cap this year there is no need for her to complete the COVID-19 recontribution form.
Scott accessed $10,000 through COVID-19 early release of superannuation.
Scott has decided to make a personal contribution of $120,000 into his super.
Scott's after-tax (non-concessional) contributions cap for the financial year is $110,000 and as he will be in excess of his non-concessional contributions cap, Scott decides to treat $10,000 as a recontribution of COVID-19 early release amounts so that he will not be in excess.
Tessa accessed $20,000 through COVID-19 early release of superannuation.
Tessa has decided to make a personal contribution into her super of $10,000.
Tessa has decided to claim a personal tax deduction for her contribution and as such is not eligible to treat the contributions as a recontribution of COVID-19 early release amounts.
Examples source: ATO, Recontribution of COVID-19 early release superannuation amounts (https://www.ato.gov.au/Individuals/Super/Growing-your-super/Adding-to-your-super/Re-contribution-of-COVID-19-early-release-superannuation-amounts/)
What to know when making recontributions
If you’ve decided the measure is right for you, you should take a moment to review your eligibility and your annual after-tax contributions cap by logging into your online account.
It’s important to note that if you’re making multiple recontributions or making recontributions to different super funds between 1 July 2021 and 30 June 2030, you must complete a form covering each contribution.
We’re here to help
If you have any questions about the recontribution of COVID-19 early release superannuation amounts, we are ready to take your call with any questions you may have.