COVID-19 superannuation announcements

There has been an update from the regulators (ATO and APRA) regarding two measures that support individuals impacted by the COVID-19 pandemic.

1. ATO: Recontribution of COVID-19 early release amounts

Clients can now recontribute amounts they withdrew under the ‘COVID-19 early release of superannuation program’ without them counting towards their non-concessional cap.

Although clients may have withdrawn amounts from a particular superannuation fund, the ATO has confirmed that the recontribution amounts can be made to any fund of their choice where the fund rules allow.

Clients will be eligible to make a recontribution of COVID-19 early release amounts to superannuation if they meet all of the following:

  • The early release amounts were accessed using the COVID-19 compassionate grounds condition of release in 2019/20 and/or 2020/21
  • The amount of the recontribution does not exceed the total amount of COVID-19 early release payments (ie. A maximum of $20,000)
  • The client treats the contribution as a COVID-19 recontribution by completing the ‘approved form’ (otherwise superannuation funds may choose to design their own approved form for their members as outlined in ATO CRT Alert 008/2021)
  • The client provides the approved form to their superannuation fund on or before the time the recontribution is made
  • The recontribution is made on or after 1 July 2021, and on or before 30 June 2030
  • The recontribution is not claimed as a personal superannuation deduction

For clients intending to make more than one recontribution, each COVID-19 recontribution amount must be detailed on a separate approved form and must not exceed $20,000 per approved form.

This is a positive announcement from the ATO as it helps clients wanting to grow their superannuation for the future.

2. APRA: COVID-19 payments and the superannuation contributions ‘work test’

According to APRA, individuals who receive the Pandemic Leave Disaster Payment (PLDP) or the COVID-19 Disaster Payment will not automatically be considered to be ‘gainfully employed’ for the purpose of the ‘work test’ and making personal superannuation contributions.

As a refresher:

  • The PLDP provides support to individuals who can’t earn an income because they must self-isolate or quarantine, or are caring for someone with COVID-19
  • The COVID-19 Disaster Payment is a support payment for workers adversely affected by a state public health order, and
  • The superannuation ‘work test’ requires individuals aged 67 to 74 years to be gainfully employed on at least a part-time basis in a financial year to make superannuation contributions

However, APRA’s view is that treatment of these COVID-19 payments differs to the treatment of the former Jobkeeper payment as:

  • Recipients of the PLDP cannot count the 14 days in which they receive the payment towards the work test, as the individual must not be working to be eligible for the payment, and
  • The COVID-19 Disaster Payment is considered to be a personal income supplement or replacement, rather than an employer-based wage subsidy.

APRA has stated that it is possible that individuals receiving these payments may return to work in the future and therefore still manage to satisfy the part-time work test.

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