Retirement
Downsizer super contributions
Prior to 1 July 2018, seniors and retirees who wished to downsize had to consider how the proceeds of the sale of their home would affect the amount of age pension they will receive.
Downsizer super contributions
Prior to 1 July 2018, seniors and retirees who wished to downsize had to consider how the proceeds of the sale of their home would affect the amount of age pension they will receive.

However, the government’s 2017-18 budget reform began allowing eligible seniors to contribute a portion of the proceeds of selling their home into their super.
What is the downsizer measure?
The downsizer measure is a budget reform that was enforced on 1 July 2018 as a way to reduce the pressure on housing affordability.
Likewise, the measure aimed to give older Australians who were no longer allowed to make super contributions (age 75 and over) a way to top up their super balance once more.
The reform allowed Australians aged 65 and over to make a lump sum contribution to their super when they sell their place of residence located in Australia to downsize.

Are you eligible for downsizer contributions to super?
Before you can take advantage of the downsizer contribution measure, you first need to ensure that you are eligible to do so.
To be eligible:
- You must be 65 years old or older when you make a downsizer contribution (there is no maximum age limit)
- The contract of sale for your home was exchanged on or after 1 July 2018
- You and/or your spouse owned the property for at least 10 years before it was sold
- Your home is not a mobile home (e.g. houseboat or caravan)
- Your home must have been acquired on or after 20 September 1985
- Proceeds from the sale of your home should be eligible for full or partial capital gains tax main residence exemption
- You must have submitted a downsizer contribution into super form to your super fund on or before making your downsizer contribution
- The downsizer contribution should be contributed within 90 days of settlement
If you don’t meet even one of the eligibility criteria above, the ATO may reject your contribution and it will be considered as voluntary non-concessional contributions.
If this happens, you may exceed the contribution caps and be required to pay the excess contributions tax.
Furthermore, you may only make a downsizer contribution once regardless of whether you maximised the $300,000 or not.
Benefits of the downsizer contribution
The downsizer contribution brings financial benefits to seniors and retirees who were previously barred from making additional contributions to their super. These include:
Increased super balances
- Older Australians may top up their super
Seniors who are 75 years old or older were disallowed from making additional contributions to their super regardless if they satisfy the work test. - Downsizer contributions on behalf of spouse
Downsizer contributions of up to $300,000 may be made to your spouse’s super even if their name isn’t on the title. This means that, as a couple, your total combined contribution may be up to $600,000.
Ease in super rules
- Voluntary contributions
Seniors aged 75 and over now have the chance to increase their super balance because it has no age limit and they don’t have to satisfy the work test. - Contribution caps don’t apply
Downsizer contributions can be made on top of any concessional and non-concessional contributions because the annual contribution caps don’t apply.
Likewise, downsizer contributions are exempt from the $1.6 million balance cap. This means your super fund must still accept eligible downsizer contributions even if you’ve reached or exceeded the total super balance cap. - No obligation
You are not obligated to buy a new home to replace your sold property – you may simply make the downsizer contribution to increase your balance.
Will downsizer contributions affect pension payments?
Downsizer contribution may affect your pension payments, but it depends on your circumstances.
While the super balance cap of $1.6 million doesn’t apply to downsizer contributions, it still counts towards the transfer balance cap of $1.6 million when you move to retirement phase.
Likewise, it counts under the assets, so it may affect your age pension entitlements and either reduce the amount you receive or cancel it out.
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