Comment RECONTRIBUTION and I’ll send you our strategy pack

Comment RECONTRIBUTION and I’ll send you our strategy pack.

If you are an adult child who received money from a parent’s superannuation after they passed away, you may not have received the full balance they accumulated.

This is because super has different tax components. Much of a person’s super may be taxable, built through employer contributions, salary sacrifice and personal tax deductible contributions.

When a death benefit is paid to an adult child who is not a tax dependant, tax may apply to the taxable component. The taxed element is generally taxed at up to 17%, including the Medicare levy.

For example, if a $100,000 death benefit was entirely taxable, an adult child who is not a tax dependant may receive around $83,000 after tax.

This is where a recontribution strategy may help.

It involves withdrawing money from super after meeting a condition of release, then contributing some or all of it back as an after tax, non concessional contribution. The aim is to potentially increase the tax free component and reduce the taxable component over time.

This strategy must be considered while the parent is alive and able to access their super. Contribution eligibility and caps also apply.

For 2026/27, the general non concessional contribution cap is $130,000. Some may qualify for the bring forward arrangement, allowing up to $390,000 over three financial years. Eligibility depends on age, total super balance, previous contributions and other rules.

Comment RECONTRIBUTION and I’ll send you our strategy pack.

General advice only. This information does not consider your objectives, financial situation or needs. Consider its appropriateness and seek personal advice before acting. Superannuation and tax laws can change, and tax outcomes depend on individual circumstances.

Amy Lehmann is an Authorised Representative (No. 1292710) of Consortium Private Wealth Pty Ltd (AFS Licence 495401).