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Concessional contributions

Concessional contributions carry forward

Section: 4.3

4.3 Concessional contributions carry forward

From 1 July 2018, a member is entitled to contribute 'unused' concessional contribution amounts, i.e., where concessional contributions have not exceeded the concessional contribution cap in previous financial years.  Only unused amounts accruing from the 2018/19 financial year onwards can be carried forward. Members can access their unused concessional contributions caps on a rolling basis for five years.

To be eligible, a member's total superannuation balance must be less than $500,000 on 30 June of the previous financial year,

A member's unused concessional contribution cap for a financial year is the amount by which their concessional contributions for the year falls short of their concessional contributions cap for the year, under s 292-20(6) ITAA97.

A member's concessional contribution cap cannot be increased by more than the amount by which they would otherwise exceed the concessional contributions cap. Hence, only the exact amount of unused concessional contributions cap that is necessary is used, and any remaining unapplied unused concessional contribution cap is preserved to be carried forward for another year.

Eligibility to access unused concessional contributions

A member's total superannuation balance can affect their eligibility to make additional concessional contributions above the annual cap by accessing their unused cap accrued from previous financial years. If a member's total superannuation balance is greater than $500,000, the unused cap can still be accumulated up to five years and used later when the balance falls below $500,000.

Unused concessional cap carry forward
Example:
The first year a member is entitled to carry forward unused amounts is the 2019-20 financial year. Unused amounts are available for a maximum of five years, and after this period will expire.
Description 2017-18 2018-19 2019-20 2020-21 2021-22
           
General concessional contributions cap: $25,000 $25,000 $25,000 $25,000 $27,500
Total unused available cap accrued: Not applicable $0 $22,000 $44,000 $69,000
Maximum cap (maximum possible contribution): $25,000 $25,000 $47,000 $25,000 $96,500
Superannuation balance 30 June the prior year: Not applicable $480,000 $490,000 $505,000 $490,000
Concessional contributions made: nil $3,000 $3,000 nil nil
Unused concessional cap amount accrued in the relevant financial year: $0 $22,000 $22,000 $25,000 $27,500
  • The member is entitled to accrue the unused concessional cap amounts in 2018/19 and 2019/20, as the total super balance at the end of 30 June in the previous year was under $500,000
  • The member is not entitled to use their unused concessional cap contributions in 2021/22 as the total super balance at the end of 30 June of the previous year was $505,000
  • In 2021/22, the member has a maximum concessional cap amount available of $96,500 ($69,000 plus $27,500) and is eligible to contribute this amount as the total super balance at the end of 30 June 2021 has now fallen below $500,000
Source: ATO

This technical resource is intended for the use of financial advisers only. It is current as at the date of publication but may be subject to change. This publication has been prepared without taking into account a potential investor's objectives, financial situation, needs or objectives. Before making a recommendation based on this material, you should consider its appropriateness based on the client's objectives, financial situation and needs. Rainmaker Group is not a registered tax agent under the Tax Agent Services Act 2009. Your client should refer to a registered tax agent before relying on information published herein that may impact their tax obligations, liabilities or entitlements.

Last modified: Monday, August 23, 2021