Retirement may be a distant thought or a worrying reminder. However, it is never too early or too late to top up your super fund for the provision of a better future. From 1 July 2018 you may be eligible to top your concessional (tax deductible) super contributions under the new carry forward rule. If you have a total superannuation balance of less than $500,000 on 30 June in the prior financial year, you are now entitled to contribute more than the usual $25,000 concessional contributions cap to catch up on prior unused caps – i.e. where you didn’t contribute and claim a tax deduction for the full $25,000 in a prior year. Concessional contributions include those made by your employer under the super guarantee system, contributions made as part of a salary sacrifice, or personal contributions where you are entitled to claim a tax deduction.

The first year that you are entitled to top up by the unused amounts is the 2019-20 financial year. The unused amounts are available for a maximum of five years and after this the unused caps will expire.

Refer to the table below for an example of when the unused concessional carry forward cap is applicable.

Description 2017-18 2018-19 2019-20 2020-21 2021-22
General contributions cap $25,000 $25,000 $25,000 $25,000 $25,000
Total unused available cap accrued Not Applicable $0 $22,000 $44,000 $69,000
Maximum cap available $25,000 $25,000 $47,000 $25,000 $94,000
Superannuation balance 30 June prior year Not Applicable $480,000 $490,000 $505,000 $490,000
Concessional contributions Nil $3,000 $3,000 Nil Nil
Unused concessional cap amount accrued in the relevant financial year $0 $22,000 $22,000 $25,000 $25,000

Source ATO :

Pro tip: are you wanting to increase your super fund balance, but you are unable to use the concessional carry forward cap? You will still be entitled to the non-concessional bring forward rule. This may allow you to increase your contributions to $300,000 for one year providing the balance is less than $1.4 Million.

Other related blogs:

Allowing catch up concessional contributions
Super Concessional Contribution Caps

Author: Lachlan Hunn