3 hours ago
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April 29, 2026 — 5:01am
I have six grandchildren and thought it was a great idea to secure an investment for their futures. I am retired, and my super has been good to me. We obtained tax file numbers and, for three of them, set up accounts with a major super fund, with their mother (my daughter) as the contact. The fund then advised that the money is now frozen.
After a couple of calls, we’ve discovered it is more complicated than simply placing money there. Regular contributions are needed to maintain any balance, as fees and management costs eat into it. Could you offer any advice on how to proceed with funds for the children?
For most families, non-super options such as savings or investment accounts, or insurance bonds, are more practical. They allow funds to grow while remaining accessible for education or major life milestones.
Super becomes far more effective once a child starts working, when employer contributions begin and balances can grow over time.
Aware Super general manager, guidance & advice Peter Hogg says, “Super is incredibly powerful – but it’s built for retirement, not childhood savings. For younger children, flexibility matters. Often, simpler investment options outside super are a better way to help kids early on, with super coming into play once they start working and employer contributions begin.”
If I keep my superannuation balance intact and do not use it to start a pension from my fund, how does Centrelink treat the capital gain on the super? Is it regarded as income and included under the Centrelink income test, or does it just increase the asset value, which is then treated under the assets test? Currently, total assets are $279,000 including the super account.
Your superannuation is assessed for both the assets test and the income test. For the assets test, the asset amount is the running balance, so any growth will automatically be considered. For the income test, the superannuation balance is given a deemed income.
What you draw is of no consequence. Just keep in mind that Centrelink assesses you under both tests, and the one that gives you the lowest pension is the one that applies.
Can you please explain the difference between taxable and tax-free components in super? My statement shows I have $300,000 in taxable and $50,000 in tax-free.
The taxable component consists of all contributions for which you or your employer have claimed a tax deduction, plus the earnings the fund has made. The tax-free component comes from non-concessional contributions made with after-tax money.
Its value within the fund does not grow per se, as the earnings are added to the taxable component.
I turned 67 in January, am single and own my home, and I am now retired with a comfortable defined benefit pension from the Commonwealth Superannuation Scheme (CSS) I also have an account-based pension of about $800,000, from which I draw 5 per cent each year, and in addition, I have been contributing $1000 per month into an accumulation account and claiming these as concessional contributions. My taxable income is around $45,000 a year.
I understand that to continue making concessional contributions I need to meet the work test, and I don’t expect to be working, even casually, in the next financial year. My question is whether I should continue the strategy by making non-concessional contributions instead, noting that I am aware of the transfer balance cap and believe I am within my limits.
You have given no indication of your total investment assets, but given the tax rate in superannuation is just 15 per cent, and because of your age there is no restriction on withdrawals, I can’t see any downside in topping up your superannuation.
Provided you have transfer balance cap space, moving your super balance to pension phase will lock in a nil tax rate on earnings. Given your relatively low income, which may reduce, there is no great benefit in making tax-deductible contributions, with all contributions at any event.
I need to carry out about $40,000 of urgent repairs on my house. My super balance of around $1 million, which had been earning about 12 per cent, has fallen significantly over the past month or so. Is it better to withdraw the $40,000 from my home loan at 7.1 per cent and pay the interest for a couple of months, then repay the loan when my super recovers? I am concerned that accessing my super now will simply lock in the recent losses. My loan value is zero, but I do have the redraw facility available.
I can’t see you have much to lose by borrowing the money because the interest will only be $237 a month, which is really nothing in the scheme of things. Make sure the bank doesn’t charge you a big fee for activating your redraw facility.
Noel Whittaker is author of Retirement Made Simple and other books on personal finance. Questions to: [email protected]
- Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.
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