Working mums will have the opportunity to boost their super thanks to contribution rules which came into play for the 2019/20 tax year.
The five year carry forward rule would mean someone returning to work who hasn’t made super contributions for the year just ended would be able to take advantage of the allowable contribution limits as well as the unused limit for the previous year.
It would also help those women who were approaching retirement.
Access to catch up contributions were only allowed if you have less than $500,000 in super and the normal annual limit for tax-deductible concessional contributions is $25,000 and must allow for employers Super Guarantee within that limit.
Head of advice at Dixon Advisory, Nerida Cole, said: “This new rule will allow more flexibility to ‘catch up’ on contributions on those lost super years.
“It means you are able to back pay into your super, which is especially important to mothers as they return to work and women as they prepare for retirement. Women continue to face significant challenges in achieving financial security as they retire from the workforce and retire with almost 50 per cent less in super than men.”
She advised women should only make the extra contributions if they had already checked they had sufficient cash reserves, had cleared all credit and high interest debt and did not need to pay down more of their mortgage.