Mr Butler reminded SMSF professionals that the removal of the gainful employment test on 1 July 2022 means there is now no work test before 75 years unless it is for a personal deductible contribution between 67 and 75.

The new rules also allow a person to do a bring forward contribution before attaining 75 subject to the total superannuation balance rules.

“Technically the deadline is 28 days after the end of the month in which they turn 75 so we do have that little bit of luxury at the end of the month plus 28 days to finalize [sic] the contribution, not that we should be encouraging that activity,” he noted.

Mr Butler said given the risk and amount of paperwork required, it’s no longer the case that contributions advice can be given as a simple answer orally.

“Gone are the days where people can ring up over the phone and say ‘look I just want a simple answer, I want to make a $300,000 contribution, can I make it? I just want a yes or no answer’,” he cautioned.

“We need to go through a process. This is going to give rise to time, effort and risk. You need to do your due diligence, do your paperwork and update your records.”

One of the first hurdles, Mr Butler continued, is the AFSL.

“Do you have a licence and is this financial product advice? This is right on the line of financial product advice so if we don’t have a licence, we have to confine ourselves to tax advice.”

“[If its tax advice], a disclaimer will need to be issued stating that its tax advice and not financial product advice and if they want financial product advice they will need to be sent to a financial planner under an AFSL.”

Mr Butler said the release of the Quality of Advice final report serves as an important reminder about some of the legal requirements and restrictions around advice.

He gave an example of Max, who is about to turn 75 and wants to make a $300,000 contribution.

“Before giving this advice, we obviously need to do some factchecking and look at the background. With Max wanting to put in $300,000, we need to look at what he’s done over the past couple of years,” he said.

“We need to get clear instructions and verify those instructions and check Max’s MyGov portal. We also need to check his total super balance, check the fund’s deed and the SISR. So, there’s a range of critical factors we need to go through.”

Assuming Max has less than $1.48 million on 1 July he might be well positioned to put in about $300,000, but checks and balances still need to be made, he cautioned.

“Our recommendation is always to put it in writing. With oral advice you’re really opening yourself up [to risk]. You really need a process within your firm to handle that. So, you need to capture the facts, go through the due diligence, update records and provide something in writing to Max so that you’re not at risk.”