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Contributing the proceeds of downsizing to superannuation

Not subject to existing contribution tests

Section: 22.3

Age and work tests

Individuals over 65 who would otherwise not be able to contribute to super can make downsizer contributions regardless of their age or work status, as the existing contribution acceptance rules do not apply to downsizer contributions.

Non-concessional cap and total superannuation balance

Furthermore, a downsizer contribution is excluded from being a non-concessional contribution.

Because a downsizer contribution is not a non-concessional contribution, it does not count towards an individual's non-concessional contributions cap. Given this, an individual's ability to make a downsizer contribution is unaffected by the total superannuation balance test, which is relevant in determining an individual's non-concessional contributions cap.

However, if a downsizer contribution is made, it will increase an individual's total superannuation balance for the purposes of that test. Individuals also cannot claim a deduction for any contributions that they choose to treat as a downsizer contribution.

Commencing an income stream

It is important to note that the amount contributed will still be counted for transfer balance cap (TBC) purposes, meaning it will still reduce your available cap space if transferred into a retirement phase income stream (RPIS).

Last modified: Monday, January 22, 2018