Carry forward unused concessional contributions
Make larger concessional contributions if you haven’t used all of your concessional cap in an earlier year
From 2019–20, carry-forward rules allow you to make extra concessional contributions – above the general concessional contributions cap – without having to pay extra tax.
The carry-forward arrangements involve accessing unused concessional cap amounts from previous years. An unused cap amount occurs when the concessional contributions you made in a financial year were less than your general concessional contributions cap.
Example
The first column shows the normal limit of concessional contributions per year.
The second column shows a running balance of what could be put into super that year as you can use your unapplied caps for up to five years.
The third column shows what contributions that were made as an example, showing that in a year where you may have surplus funds you can contribute more than the usual amount.
Financial year | Annual CC cap amount | Total CC cap including any carried forward CCs | Concessional contributions made | Unused CCs that may be carried forward |
2018/19 | $25,000 | $25,000 | $15,000 | $10,000 |
2019/20 | $25,000 | $35,000 | Nil | $35,000 |
| 2020/21 | $25,000 | $60,000 | $15,000 | $45,000 |
| 2021/22¹ | $27,500 | $72,500 | $50,000 | $22,500 |
To use the unused cap amounts you need to meet two conditions:
- Your total super balance at the end of 30 June of the previous financial year is less than $500,000.
- You made concessional contributions in the financial year that exceeded your general concessional contributions cap.
The oldest available unused cap amounts are used first. For example, unused cap amounts from 2018–19 would be applied to increase your cap first before unused cap amounts from 2019–20.
Unused cap amounts are available for a maximum of five years and will expire after this. For example, a 2018–19 unused cap amount which is not used by the end of 2023–24 will expire.
If, after applying all your available unused cap amounts, you still have excess concessional contributions, you may need to pay extra tax.
Warning about Division 293 tax!
If your income including concessional contributions into super is above $250,000 you will be liable for an extra 15% tax inside your superannuation fund on the total of the contributions received even if they are using a prior year cap where your income was less than $250,000
Contributing extra funds to super can be a complicated area and you should seek professional advice relating to your circumstances.
To find out more about the catch-up concessional contributions incentive and how it might work for you, contact Intuitive Super’s award-winning team on 1300 856 064 today.
Source: ATO
