You may be eligible to make concessional contributions that are greater than the annual cap if you haven’t fully used your concessional cap in an earlier year. This could help you to save even more for retirement, while also managing tax.
What are concessional contributions?
There are a number of ways you can contribute to superannuation. Depending on certain factors, contributions may be categorised as concessional or non-concessional. There are also other types of contributions that are not considered to be either concessional or non-concessional. Concessional contributions (CCs) commonly include:
CCs (within your cap – see below) are taxed at the concessional rate of up to 15% (or up to 30% if your income from certain sources exceeds $250,000) within your super fund. However, additional tax and penalties may apply for contributions made in excess of your cap. Non-concessional contributions include those made with after-tax money, such as your take home pay, or funds in your bank account. A different cap applies to non-concessional contributions. See ato.gov.au.
What are catch-up contributions?
Caps apply to limit the contributions you can make to superannuation without having to pay additional tax and other penalties. The cap that applies depends on the type of contribution made. Contributions that are considered to be ‘concessional contributions’ count towards the annual CC cap. From 2018/19 to 2020/21, this annual cap was $25,000, which then increased to $27,500 in 2021/22 and remains unchanged in 2022/23 and 2023/24. If you don’t fully utilise your CC cap in an income year (from 2018/19 onwards), you’re able to ‘carry forward’ the unused cap amount, and you may be eligible to make ‘catch up’ concessional contributions in a subsequent year.
What eligibility rules apply?
To be eligible to make catch up CCs you need to:
Remember that you can only carry forward unused CCs for 5 income years, after which they expire.
How to access carried forward CC details on MyGov
There are a few ways you can monitor your available carried forward CCs. This includes:
It is recommended that detailed records also be maintained and that you refer to your own records rather than relying only on the information in MyGov. This is because there may be a delay before your super fund reports details about your contributions to the ATO. Remember, additional tax applies for excess contributions.
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