Maximising your super contributions, specifically your carry-forward concessional contributions, provides an opportunity to increase your superannuation balance.
There are two types of contributions. The first is known as a concessional contribution, and the second is a non-concessional contribution. However, in this article we will focus on the concessional contributions.
You or your employer can make a concessional contribution, subject to the contribution eligibility rules. Generally, there are three types of concessional contributions:
1. Superannuation guarantee (SG) contributions: These are mandatory contributions your employer makes to your super fund on your behalf.
2. Salary sacrifice contributions: These contributions are an arrangement with your employer where you voluntarily contribute part of your pre-tax wages towards your super fund.
3. Personal concessional contributions: These are contributions that you make personally, directly from your bank account to your super fund. You can then claim a tax deduction later on via your tax return.
The current super contribution cap for concessional contributions is $27,500 per year and has been since 1 July 2021. From 1 July 2017 to 30 June 2021 the concessional contribution cap was $25,000.
However, for those that meet the eligibility requirements, you can contribute more than just the current concessional contribution cap by utilising the carry-forward concessional contributions cap. This ability to make extra contributions, above the standard concessional contribution cap, is ideal for people who have had substantial breaks from work.
The carry-forward concessional contribution cap allows you to utilise your unused concessional contribution caps for a maximum of 5 years, after which they will expire.
To be eligible, you must meet the following requirements:
• Have a total super balance of less than $500,000 as of 30 June of the previous financial year.
• Be under 67 years, or if you are between 67 and 75, you will need to have satisfied the work test or work test exemption before making personal concessional contributions.
How it works
The below table outlines a person’s concessional contributions and unused concessional contribution caps for the previous five years.
Based on the information below, and assuming they meet the eligibility criteria, this person could make concessional contributions of up to $101,000, consisting of the $73,500 unused concessional contribution cap plus the annual cap of $27,500 for 2023/24 financial year.
| Financial year | Concessional contributions cap
(A) |
Concessional contributions
(B) |
Unused concessional contributions cap
(A – B) |
| 1 July 2022 – 30 June 2023 | $27,500 | $15,000 | $12,500 |
| 1 July 2021 – 30 June 2022 | $27,500 | $13,000 | $14,500 |
| 1 July 2020 – 30 June 2021 | $25,000 | $10,000 | $15,000 |
| 1 July 2019 – 30 June 2020 | $25,000 | $9,500 | $15,500 |
| 1 July 2018 – 30 June 2019 | $25,000 | $9,000 | $16,000 |
| $130,000 | $56,500 | $73,500 | |
| Total carry-forward concessional contributions cap | $130,000 | ||
| Concessional contributions | $56,500 | ||
| Unused concessional contributions cap available to carry-forward | $73,500 | ||
Written by
Michael Simmons
Financial Planner