Q: My sister, 69, recently inherited $400,000. She has no money in super and lives in a granny flat supplied by her daughter. She works part-time but the income is minimal. Can she transfer the inheritance to a super fund tax-free to start an account-based pension, or is there some tax to pay on the lump sum transfer? Once in super she intends to take $20,000 per year. If she took less than this, is there a minimum amount that must be withdrawn each year? A financial adviser has told her that she should be able to get a part age pension, make the super contributions and keep working to supplement her income? Paul.

A: Your sister can absolutely add her inheritance into superannuation tax-free. She can do this by opening an account in a super fund of her choice and then making non-concessional contributions, also known as after-tax contributions, into this account from her inheritance.