If you are looking to increase your super, and are aged 75 or under, then a good way is through making non-concessional contributions. Since 1 July, there has been greater opportunities for additional non-concessional super contributions that may help you in achieving more super.
When and why make non-concessional contributions?
If you sell an asset of considerable value or receive a significant financial windfall, it could give you the opportunity to deposit that money into your super and better help you fund your retirement and future.
What are non-concessional contributions and bring forward non-concessional contributions?
Non-concessional contributions are after tax contributions made to super with no 15% contribution tax on the way in. The standard non-concessional contribution cap in 2023/24 is $110,000 per annum.
In addition, the bring-forward non-concessional contribution rule allows you to make up to three years’ worth of non-concessional contributions in one financial year ($110,000 x 3). There are certain eligibility criteria that you need to meet such as total super balance restrictions, but it does mean you might be able to boost your super balance by up to $330,000 in a tax effective environment.
What is total super balance (TSB)?
Generally, your TSB is the sum of all amounts you have in the super system at 30 June each year. At a high level, it includes:
- your accumulation account balances
- your super pension accounts.
Exceptions and modifications may apply. Calculating TSB can be complex, so it’s important to seek advice.
What has changed from 1 July 2023?
Since 1 July 2023, the general transfer balance cap has increased to $1.9 million (increase from $1.7m).
The total super balance threshold for making non-concessional contributions has increased to $1.9 m. This increase in the total super balance threshold means there are more opportunities to make non concessional contributions under the bring forward rule this financial year.
This is because in the year the bring forward contribution is triggered, the increased total super balance (TSB) thresholds allow greater opportunities to make larger non-concessional contributions as outlined in the following table:
Total super balance at 30 June 2023 | Non-concessional contributions available in 2023/24 |
|---|---|
Less than $1.68 m (previously $1.48m) | Up to $330,000 |
At least $1.68 m but less than $1.79 m (previously $1.59 m) | Up to $220,000 |
At least $1.79 m but less than $1.9 m (previously $1.7 m) | Up to $110,000 |
$1.9 m or greater (previously $1.7 m) | Nil |
These rules are complicated, so it’s important to seek professional financial advice.
Important Information
This publication is prepared by Actuate Alliance Services Pty Ltd (ABN 40 083 233 925, AFSL 240959) (‘Actuate’), a member of the Insignia. Financial group of companies (‘Insignia Financial Group’). The information in this publication is general only and has not been tailored to individual circumstances. Before acting on this publication, you should assess your own circumstances or seek personal advice from a licensed financial adviser. This publication is current as at the date of issue but may be subject to change or be superseded by future publications. In some cases, the information has been provided to us by third parties. While it is believed that the information is accurate and reliable, the accuracy of that information is not guaranteed in any way. Past performance is not a reliable indicator of future performance, and it should not be relied on for any investment decision. Whilst care has been taken in preparing the content, no liability is accepted by any member of the Insignia Financial group, nor their agents or employees for any errors or omissions in this publication, and/or losses or liabilities arising from any reliance on this document. This publication is not available for distribution outside Australia and may not be passed on to any third person without the prior written consent of Actuate.