Hello Rashmi
Thanks for the question.
For the 2022 income year, a 67 to 74 year old needed to satisfy the “work test” in order for the fund to accept a member contribution, including a non-concessional contribution.  From 1 July 2022, the requirement to satisfy the work test for a 67 – 74 old in relation to a non-concessional contribution has been removed.
As Regulation 7.04(4) applied for the 2022 income year, where a trustee of a super fund was not able to accept a contribution, but mistakingly did so, they are under an obligation to return the contribution within 30 days of becoming aware that the contributions should not have been accepted. This obligation to return the contribution remains even if more than 30 days since becoming aware of the matter have already elapsed.
I don’t think there is a need to pay out “interest” on top of the contribution accepted in error. Section 109 deals with investments made by the trustee of the super fund being undertaken on arm’s length basis.  I take the view that incorrectly accepting a contribution is not the making of an investment by the trustee of the fund.
Summary
Breaches of SIS Regulation 7.04 are listed in Table 1B in the ATO’s “List of reportable regulations”. Accordingly, the relevant breach is of Regulation 7.04. The trustee needs to return the contribution made by the wife in the 2022 income year, who was aged between 67 – 74 when it was made, and did not satisfy the work test.
Happy to hear the thoughts of other auditors on this matter.
Best regards
The Auditors Institute