Can an Australian Expat Contribute to their Australian Superannuation?

For many Australians heading overseas, questions about Australian assets such as superannuation often arise. Can an Australian Expat contribute to their Australian Superannuation if they’re no longer earning income in Australia? The short answer is yes, but there are things you should know before deciding it’s the right move financially.

Here’s what every Aussie Expat needs to know about contributing to their Australian Superannuation while living overseas.

1. Yes, Australian Expats can contribute to Superannuation

Once you’re living and working abroad, your employer (especially if it’s not an Australian company) is not required to make super contributions for you. However, you can still make voluntary contributions to your super fund, even if you’re not living or working in Australia.

Whether you are a resident or a non-resident for tax purposes in Australia, the rules governing your superannuation are largely unchanged. There are, however, exceptions for non-residents with a Self-Managed Super Fund (SMSF), which will be discussed later.

2. Watch your Contribution Caps

Even if you’re living overseas, the usual Super contribution caps still apply:

• Concessional (pre-tax) contributions: $30,000 per financial year, or up to $162,500 under the ‘carry forward’ contribution rule; and

• Non-concessional (after-tax) contributions: $120,000 per financial year, or up to $360,000 over 3 years under the ‘bring-forward’ rule.

  
  

Going over these limits could result in tax penalties, so it’s important to keep up to date with the current limits, as these are indexed from time to time.

3. Why bother contributing if you’re Overseas?

Here’s why it might be worth continuing to contribute to your Super as an Australian Expat:

• Long-term retirement saving: With a maximum tax rate of 15% on investment earnings, superannuation is still one of the most tax-effective ways to save for retirement. The tax rate on earnings further reduces to 0% once you retire and start taking a pension from your super.

• Reduce taxable income in Australia: You can still make personal contributions to your super and claim the amount as a tax deduction. This can be effective if you have taxable income in Australia, such as rental income or capital gains from the sale of property.

• Diversification: Investing through your super can give you exposure to Australian markets. These include assets in both public and private markets, allowing you to diversify your assets, balancing any international investments you may have.

Many Australian Expats have intentions to return home at some stage, so continuing to grow your super while overseas can ensure you’re not having to play catch-up later.

4. Choose the right Super fund for your circumstances

The number of superannuation funds in Australia is extensive, with some now offering features such as direct investment in shares, ETFs, or other listed investments. Some Super funds are better than others. Look for a fund that:

• Allows contributions from overseas

• Offers easy online access and international support

• Has competitive fees and good long-term performance

If you’re planning to be overseas long-term, consolidating your super into a single fund will also make things simpler to manage.

Learn more about our Superannuation Advice for Australian Expats.

5. Review Insurances inside Super

Many super accounts include life, TPD (total and permanent disability), or income protection insurance, but moving abroad can affect whether you're still covered. Some policies may become invalid if you’re not an Australian resident.

As an Australian Expat residing overseas, it’s important to check:

• Whether your insurance will remain valid while living overseas; and

• If you still need those premiums deducted, if you're no longer covered.

  
  

6. Consider any Tax Implications in your Host Country

Superannuation is not always treated favourably for tax purposes in your host country. This is a complex area. and can be difficult to navigate where your host country does not have a tax treaty in place with Australia, or the treaty does not have clear provisions on the treatment of super.

A notable example is the United States (US), where contributions to your Australian super fund may be reportable in your US tax return, leading to additional tax forms with the Internal Revenue Service (IRS). So, can an Australian Expat contribute to their Australian superannuation while in the US? Yes, but due to the tax implications, there may be a more appropriate way to save for your retirement.

It is highly recommended to seek tax advice before contributing to super if you reside in the US.

7. Risks for Self-Managed Super Funds (SMSF)

Australian Expats with a Self-managed super fund (SMSF) can encounter challenges when contributing to their SMSF while overseas. This is because contributions to the fund may lead to the fund becoming non-compliant with the Australian Tax Office (ATO).

To be compliant with Australian law and receive tax concessions, an SMSF needs to meet a resident test at all times during the financial year, otherwise, it can face significant tax penalties up to 47%. SMSF’s for Australian Expats are generally not a good idea because of the difficulties in meeting the conditions of a residency test. You can learn more about SMSF’s for Australian Expats here.

Conclusion: Can an Australian Expat Contribute to their Australian Superannuation?

Yes, an Australian Expat can contribute to their Australian Superannuation. However, Australian Expats should only contribute to their Super if it aligns with their financial goals and suits their personal situation. While the rules that govern superannuation can be complex, even more so when living overseas, it remains a powerful tool for long-term wealth and retirement planning for Australian Expats. Working with a specialist Expat Financial Adviser can help you navigate your superannuation effectively while living overseas, ensuring you take advantage of the financial opportunities it has to offer.

Runway Wealth Management is the trusted Financial Adviser to the Australian Expat community. Our tailored advice is backed by expertise, education and experience, which allows us to be at the forefront of Australian Expat Financial Planning.

If you would like to speak to one of our Expat Financial Advisers about this blog or if you have other queries, we would be more than happy to speak with you. Feel free to send us an enquiry through the ‘Contact Us’ tab provided in the link below:

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General Advice Disclaimer: The information contained herein is of a general nature only and does not constitute personal advice. You should not act on any recommendation without considering your personal needs, circumstances, and objectives. We recommend you obtain professional financial advice specific to your circumstances.