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 : https://www.ato.gov.au/Rates/Key-superannuation-rates-and-thresholds/?page=3
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
Email: lachlan@faj.com.au
