The financial benefits of considering a super re-contribution strategy

Sep 17, 2023 | Financial coaching, Superannuation

From 1 July 2022 there was a major change to the superannuation system. From this date, the work test from no-concessional or post-tax contributions after the age of 67 was removed.  

The change has meant that there are opportunities for people who have retired and have money in their own name, to consider contributing amounts to super.  

The recent change also opens up the possibility of using a re-contribution strategy. A “re-contribution: is where you have met the full conditions of release for your superannuation (e.g. reached the age of 65 years old, retiree etc.) and withdraw a sum, only to then re-contribute money to your super or potentially your spouse’s super. 

Why would you do re-contributions? There are a number of benefits to consider.

Super is made up of components which are tax-free, taxable-taxed and taxable-untaxed . The majority will only have tax-free and taxable-taxed components. A recontribution strategy increases the tax-free component of the super fund.  

When a spouse receives super it is received tax-free however when non-tax dependant beneficiaries receive super there is tax payable on the taxable-taxed component and up to 17% can be applied. No tax is levied on the tax-free component.  

By withdrawing and re-contributing you can increase the tax-free component of your super and in turn reduce the tax implications for non-tax dependants. This includes children over the age of 18 who are not financially dependent on you). 

Here is an example – Jill and John have three children all over 18. None of their children are financially dependant on Jill and Jon. Jill has $500,000 in super and $425,000 is taxable-taxed with $75,000 tax-free. Jill is aged 70 and withdraws $330,000 from super and then re-contributes.  

How does this affect things? 

Before  Value  Weight  Max. Tax 
Tax-Free  $75,000  15.0%  $0 
Taxable-taxed  $425,000  85.0%  $72,250 
Total  $500,000       
Re-contribute  $330,000       
Tax-Free  $49,500  15.0%    
Taxable-taxed  $280,500  85.0%    
After re-contribution  Value  Weight  Max. Tax 
Tax-Free  $355,500  71.1%  $0 
Taxable-taxed  $144,500  28.9%  $24,565 
Total  $500,000       


Of note is that the withdrawal must come out in the same proportion of taxable to tax-free and the maximum post-tax or non-concessional amount you can contribute is $330,000 using the bring forward rule. 

There is a lot to consider before utilising this strategy and looking at access to super and eligibility to contribute being two. 

I am here to support you and advice on your unique situation. Please note that this is not financial advice. There are a lot of considerations to take into account and eligibility rules involved in doing this and a discussion with a financial adviser would be prudent. If you are over 65 or have a spouse who is, I would strongly recommend you book in for a chat to explore if re-contribution may be applicable for you in your situation.  

Learn more about super re-contributions in the below blog.

What is a super re-contribution strategy and who needs one? FAQs

About the author

Simon Duigan is an Independent Financial Advisor and owner of Core Independent Financial Advice (Core IFA). Core IFA is 100% independent and receives no commissions or benefits from any product providers or financial institutions.. Instead, you can be confident that Core IFA have your best interests at heart.


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