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For some years, concessional (deductible) contribution caps have limited annual contributions to superannuation to $25000.00. However, new carry-forward arrangements, commencing from 1 July 2018, can modify that cap.

The new arrangements effectively increase the current year contribution cap by un-used caps of previous years. Conditions apply as follows:

  • Your super fund’s balance at the end of 30 June for the previous financial year is less than $500,000.
  • Your concessional contributions for a year must exceed the relevant cap for that year to trigger the new arrangements.
  • Unused cap amounts expire after five years. For example, a 2018–19 unused cap amount not used by the end of 2023–24 will expire.

Following is an example:

For the last five years, a taxpayer makes concessional contributions to superannuation, resulting in the corresponding un-used caps:

2019-20 $10000 – $15000
2018-19 $10000 – $15000
2017-18 $5000   – $20000
2016-17 $5000   – $25000 (see note below)
2015-16 $5000   – $25000 (see note bleow)

NOTE: For the 2014–15, 2015–16, and 2016–17 financial years, the concessional contributions cap is $30,000 per financial year, increasing to $35,000 for 49 or over.

In 2020-21, the taxpayer can contribute $25000 plus the un-used caps amounting to $100000. Total concessional contributions in 2021 are $125000, subject to meeting the fund balance condition.

Taxpayers need to be aware that Division 293 is an additional tax that applies where your combined income and concessional contributions for a given year are more than $250,000. Further, where superannuation contributions exceed the concessional caps, the ATO has mechanisms for a resolution.

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