Why it matters
Super is made up of a tax-free component and a taxable component. While you are alive and over 60, withdrawals are generally tax-free either way. The difference shows up when you die: the taxable component paid to non-dependants, such as most adult children, can be taxed at 15% plus Medicare levy (higher for an untaxed element).
Recontributing converts taxable dollars into tax-free dollars, which can mean more for your beneficiaries.
What you need
- Access to super: usually you must have met a condition of release, such as retiring after preservation age (60) or reaching 65.
- Room under the non-concessional cap: $130,000 for 2026–27, or up to $390,000 with bring-forward if you are under 75 and eligible.
- A total super balance under the general transfer balance cap ($2.1 million for 2026–27).
Watch-outs
- Withdrawals come out in proportion to your existing components; you can’t pick only taxable money.
- If you are in a retirement income stream, commuting it affects your transfer balance account.
- Centrelink means testing can change.
- Excess contributions have consequences, so check caps first.
This is a strategy where order and timing matter. Read super death benefits and adult children, or talk to us about retirement planning.
Quick answers
Who might a recontribution strategy suit?
Often people aged 60 to 74 with a large taxable component who expect super to pass to adult children.
Sources
General advice warning. This article is general information only and does not take into account your objectives, financial situation or needs. Rules and thresholds change; check the sources above. Consider the relevant PDS and our Financial Services Guide and seek personal advice before acting. FinForce is authorised under Financial Force Pty Ltd AFSL 238337. Shay has been authorised since 18 October 2011.