Concessional Contribution to Super Account

I have a pension income stream and also a super account with leftover funds. Do super rules still allow me to make a concessional contribution to my super account even though I am drawing an income from my pension account?
Thanks for anticipated replies.

 

Hi geoffw.
Thanks for your reply.
I am 62 and retired, and wanting to make a concessional contribution to reduce a capital gain.

 

The limit is $27500. There is no carry forward due to my total amount in super which is over 500k.

 

ATO info
Super contributions - too much can mean extra tax

Aged under 67 years
If you are under 67 years of age your fund can accept all types of contributions, except downsizer contributions (these can only be made if you are 65 years or older).

Before 2020–21, the age limit was under 65 years old.

 

Thanks Chris.

 

An excellent point! My estimated taxable earnings will be well above the 18k threshold therefore certainly over 15%.

 

So Geoff this post indicates that you are in a similar situation to me i.e. two separate accounts.

 

It sounds like you have a SMSF whereas I don't.
With everything said, and it's financially advantageous to do so, am I able to contribute to my super account while simultaneously drawing down from my pension account? Sounds like we've gone around in a circle albeit a very interesting circle. I appreciate your input .

 

Thanks geoffw.

Understand what you say. I wouldn't directly act on "advice"picked up on a forum however sometimes the best ideas can be garnished from the many readers who use it and thus how we broaden our knowledge.
I have an adviser but obviously having a well earned break.

 

The deduction issue will be limited by the accumulation account balance. If you contributed $50K and want to claim a $50K deduction but the account balance is now $45K then the deduction will be limited to $45K. If you have drawn $10K out of the accum account it also limits deductions. In addition, if any movement from accum to pension has already occurred you wont be able to action the deduction. Drawing $$$ out of super can affect deductions. Wise to act quickly if thats the case.

 

Hi Paul.
I withdrew 1.7m this financial year and placed these funds into a pension account leaving 200k in accumulation account. So following on from what you are saying, am I right to assume that I cannot claim a tax deduction for a concessional contribution also made this year?

 

I dont know. But it may, or may not, substantially erode that ability. Speak to the fund.

eg Fred has a accum account with $1.85m. He contributes $50K based on his concessional cap + carry forward unused cap expecting to claim a $50K deduction. His TSB is now $1.9m.
He then immediately starts a pension of $1.7m. This leaves a accum balance of $200K.

This may limit his deductible contribution to $50,000 x ($200k / $1.9) = 10.5263% x $50K = $5263 as deductible DEPENDING ON OTHER FACTORS incl dates and timing. It will also mean Fred has triggered his bring forward 3 year non-concessional cap IF its available. It could mean excess contributions penalties. If Fred had contributed to a smsf there may be a fix.

 

If he's got that much super he won't have any carry forward available to him?

 

Not necessarily. It may have been a CGT amount (or even a rollover) made prior to the end of the year. The test date is 1 July of the prior tax year. I didnt want to introduce that. The idea remains the same.