How does it work?
From 1 July 2018, if you have a total super balance of less than $500,000 on the previous 30 June and you make or receive concessional contributions (CCs) of less than the concessional contributions cap of $25,000 pa, you may be able to accrue unused amounts for use in subsequent financial years.
2018/19 is the first financial year you can carry forward unused cap amounts and these amounts can be used from 1 July 2019. Unused cap amounts can be carried forward for up to five years.
What are the benefits?
Greater flexibility to make concessional contributions which may be helpful even if you have broken work patterns, or can’t afford to contribute in a particular year.
Case study
Fatima took 12 months maternity leave from 1 July 2018 and didn’t make any CCs in 2018/19.
From 1 July 2019, Fatima returned to full-time work where her CCs totalled $15,000, which is $10,000 less than the cap amount of $25,000.
The table below shows how she can carry forward $25,000 in unused CCs in 2018/19 and $10,000 a year thereafter.
It also shows how much she could contribute each financial year if she wanted to use up the carried forward unused cap amounts, as well as the standard annual CC cap.
For example, in 2020/21 she could make CCs totalling $60,000 and $80,000 in 2022/23.
Fatima may be able to use the accrued cap amount if she had surplus cashflow or savings, received a windfall or inheritance or sold other investments.
Financial year |
Annual CC cap amount |
Carried forward cap available at start of financial year |
Concessional contributions made |
Unused cap carried forward from end of financial year |
|---|---|---|---|---|
|
2018/19 |
$25,000 |
$25,000 |
Nil |
$25,000 |
|
2019/20 |
$25,000 |
$50,000 |
$15,000 |
$35,000 |
|
2020/21 |
$25,000 |
$60,000 |
$15,000 |
$45,000 |
|
2021/22 |
$25,000 |
$70,000 |
$15,000 |
$55,000 |
|
2022/23 |
$25,000 |
$80,000 |
$15,000 |
$65,000 |
Important things to consider
-
To use up carried forwards cap amounts, you may want to make salary sacrifice or personal deductible contributions.
-
You can’t access your super until you meet a condition of release such as reaching preservation age and retiring.
Please contact us on Phone (03) 51 433 450 if you seek further discussion on this topic .
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