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Non-concessional contributions

Bring forward arrangements

Section: 5.4

If member is under age 65 at any time during a financial year, there is capacity to bring forward one or two years' worth of non-concessional contributions (i.e. $200,000 cap over two years or $300,000 cap over three years) depending on their total superannuation balance on 30 June of the previous financial year. There is no requirement to elect to use the bring forward rule. It is automatically triggered in the first financial year in which a non-concessional contribution exceeds the annual limit.

It should be noted that members with balances close to $1.6 million are only able to bring forward the annual cap amount for the number of years that would take their balance to $1.6 million.

The following table sets out the bring forward cap and bring forward period depending on the individual's total superannuation balance on 30 June of the previous financial year:

Superannuation balance on 30 June Contribution and bring forward
less than $1.3 million 3 years ($300,000)
$1.3  - $1.4 million 3 years ($300,000)
$1.4 - $1.5 million 2 years ($200,000)
$1.5 - $1.6 million 1 year ($100,000)
$1.6 million or more Nil

Proposed changes from 1 July 2020

The Treasury Laws Amendment (More Flexible Superannuation) Bill 2020, which was introduced into parliament on 13 May 2020, proposes that individuals aged under 67 years (up from under 65 years) whose non-concessional contributions exceed $100,000 would be able to access the bring forward arrangements for non-concessional contributions from 1 July 2020. The Bill has not yet been passed by parliament.

Transitional bring forward arrangement

Transitional arrangements apply to members who brought forward their non-concessional contributions cap in the 2015-16 or 2016-17 financial years. These rules ensured members did not retain the benefit of higher pre-2017-18 caps for any part of the bring forward period that occurred in 2017-18 or later years.

Where member triggered their bring forward period in the 2015-16 financial year, their non-concessional contributions cap for the first (2015-16) and second (2016-17) years are set by the rules that applied to those years. Their cap for the 2017-18 year is determined under the standard calculation for the third year cap, but applied as if the first year cap had been $460,000 (ie $180,000 for 2015-16, $180,000 for 2016-17 and $100,000 for 2017-18). The member is entitled to contribute $460,000 over the bring forward period.

Where a member triggered the bring forward in the 2016-17 financial year, their non-concessional contributions cap for the first (2016-17) year is set by the rules that applied to that year. Their cap for the second (2017-18) and third (2018-19) years is determined under the standard calculation for those caps, but applied as if the first year cap had been $380,000 (ie $180,000 for 2016-17, $100,000 for 2017-18 and $100,000 for 2018-19). The individual is entitled to contribute $380,000 over the bring forward period.

The bring forward rule is not available for members aged 75 and over.

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: Tuesday, September 15, 2020