My client is about to turn 65. He retired from the workforce several years ago but has maintained a $1,000,000 life insurance policy within the AIA (Insurance) Super Scheme. Can he keep this policy beyond the age of 65, despite not being able to meet the super contribution ‘work test’?
Yes, providing he can fund the premiums via a rollover from another taxed superannuation fund. So if the premium amounts to net $5,000, he would simply instruct the trustee of his other super fund (assuming one exists) to rollover $5,000 into the AIA (Insurance) Super Scheme.
In broad terms, a fund trustee can only accept contributions from individuals aged 65 and over if the ‘work test’ has been satisfied. This test requires the individual to have been gainfully employed for at least 40 hours in a consecutive 30 day period at some stage in the financial year prior to the date of the contribution.