How do I recontribute to my Super?

Have you always wondered how you could pay less tax in your super? With help from Endorphin Wealth, you can now recontribute super to minimise the payable tax on either a super income stream or when your inheritors receive your super benefits.

By withdrawing and then recontributing your super, it will be classified as a non-concessional contribution. This means the tax-free proportion of your super will increase. With this strategy, you may save money in the long run.

This means more spending power and a more comfortable future.

How does recontribution work?

The recontribution strategy will first need you to be able to withdraw a lump sum from your superannuation. This means you must have either met a full condition of release, such as retirement or reaching 65. Another way is that you have unrestricted non-preserved money already in your account.

To continue making contributions, you need to be either under 67, or be under 75 and work for at least 40 hours over more than 30 days in a financial year. This is called the work test. It provides an exemption for one-year relief for recent retirees. It is available in the financial year following the year you last met the work test, where your total superannuation balance is less than $300,000 as of the prior 30 June and provided you have not previously used the exemption.

Step 1: Withdrawing your funds from super

After meeting all the requirements, you are able to withdraw money from your super account. Depending on the amount that is in your taxed and tax-free components, the withdrawal will proportionally draw from both accounts. This means that if your tax-free component makes up 20% of your account balance prior to withdrawal, then 20% of any withdrawal is the tax-free component and 80% is from the taxable component.

If you are above 60, you do not need to pay tax on either component if you’re a member of a taxed fund. You’re only liable for tax on a withdrawal if you are in an untaxed superannuation scheme.

If you are under 60, you’re entitled to the ‘low-rate cap’. This is a lifetime amount that you may withdraw from the taxable component of your superannuation, without paying tax.

Step 2: Recontributing the funds back into super

After making the withdrawal we then contribute the funds back as a non-concessional concession. If you are under age 67 on the 1st of July and your total superannuation balance is less than $1.4 million, you may be able to bring forward up to two years of non-concessional contributions. This is called the bring-forward rule and will let you pay a larger amount sooner.

However, this is a complex financial action. Hence, important to seek independent financial advice as your situation may differ.

How can this benefit me?

The strategy is effective also under the following circumstances:

Income tax perspective: A recontribution is still beneficial for those aged between preservation age (from age 58) and age 60 and who are expecting to receive a superannuation income stream as they do not need to pay tax on taxable components.

Estate planning perspective: This strategy can also be used where there is some likelihood that your superannuation benefits will be received by those not considered to be dependants under taxation law, such as adult children. This means it can decrease the potential tax payable from inheritors.

However as mentioned, it is a complex strategy and it is important to consider seeking professional advice. The team at Endorphin Wealth has both the experience and knowledge to implement these strategies and revamp your retirement plans.

For an obligation-free conversation about your financial future, please contact us on 03 9190 8964 or at

The team at Endorphin Wealth are passionate about helping people achieve their life goals with great financial planning. We are not licensed or owned by big banks and financial institutions. So the advice and wealth management we provide is always in our client’s best interests. We have the advantage of being able to access a range of products from different providers. This means that our advice can be tailored to our client’s goals. We have offices located in Sydney and Melbourne, where you can find a financial advisor that is suitable for you.