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The ability to bring-forward non-concessional contributions is impacted by a client's total super balance at 30 June of the previous financial year.
In addition, a client's total super balance in year 2 or 3 of a bring-forward period determines whether any remaining cap can be used.
Bring-forward period
Clients under age 75 at any time in a financial year may effectively bring-forward up to two years’ worth of non-concessional contributions cap for that income year, allowing them to contribute a greater amount (potentially up to $360,000 in 2024–25) without exceeding their non-concessional contributions cap.
The non-concessional cap available when triggering the bring-forward rule, and access to (and length of) a bring-forward period is determined based on caps and total superannuation balance thresholds in the year it is triggered.
Year 1 of the bring-forward period
The tables below show the number of years that may be brought forward into the first financial year, determined by the client's total super balance at 30 June prior to the relevant financial year.
It’s important to note that the total super balance thresholds in the tables only apply in the year that the bring-forward rule is triggered (Year 1 of bring-forward period).
Year 2 and year 3 of the bring forward period - total super balance
While the total super balance thresholds in the tables below only apply in Year 1 of the bring-forward period, the client's total super balance is still relevant in Year 2, or Year 3 (where applicable).
In Year 2 or Year 3 of a bring-forward period, their total superannuation balance just prior to the relevant financial year must be equal to or greater than the general transfer balance cap for that year.
Where their total super balance exceeds the general transfer balance cap, their non-concessional contributions cap for that financial year is reduced to nil - this means that any non-concessional contributions made in that year will be in excess of the non-concessional contributions cap.
The general transfer balance cap is:
- $1.6m for 2017-18 to 2020-21
- $1.7m for 2021-22 and 2022-23
- $1.9m for 2023-24 and 2024-25.
Tables 1 - 3 below demonstrate the interaction between total super balance and the available cap under the bring-forward rule, in the particular financial year that the bring-forward is triggered (Year 1).
Choose the particular table that applies to your client, according to the financial year they triggered the bring forward rule.
The examples below the tables demonstrate the interaction between the bring-forward rule and a client's total super balance.
Table 1: Bring-forward was triggered in 2022-23
Less than $1.48 million
$330,000 (3 year bring forward period)
2024-25
At least $1.48m but less than $1.59m
$220,000 (2 year bring forward period)
2023-24
At least $1.59m but less than $1.7m
$110,000 (no bring forward available)
N/A
$1.7 million or more
Nil
N/A
Table 2: Bring-forward was triggered in 2023-24
Less than $1.68 million
$330,000 (3 year bring forward period)
2025-26
At least $1.68m but less than $1.79m
$220,000 (2 year bring forward period)
2024-25
At least $1.79m but less than $1.9m
$110,000 (no bring forward available)
N/A
$1.9 million or more
Nil
N/A
Table 3: Bring-forward was triggered in 2024-25
Less than $1.66 million
$360,000 (3 year bring forward period)
2026-27
At least $1.66m but less than $1.78m
$240,000 (2 year bring forward period)
2025-26
At least $1.78m but less than $1.9m
$120,000 (no bring forward available)
N/A
$1.9 million or more
Nil
N/A
Example 1 − Bring-forward triggered in 2022-23 (Table 1)
Year 1: On 30 June 2022, Laura’s total superannuation balance is $1.45 million (below the threshold of $1.48m to be eligible for a three-year bring-forward cap - see Table 1).
On 1 July 2022, she contributes $180,000, triggering a three-year bring-forward period. $150,000 of her $330,000 bring-forward cap remains immediately after this contribution.
Laura did not make any further contributions in 2022-23.
Year 2: Laura did not make any further contributions in 2023-24.
Year 3: On 30 June 2024, Laura’s total superannuation balance is $1.67 million (having increased with her contributions and earnings over the previous years).
Laura’s remaining bring forward cap is still $150,000 ($330,000 - $180,000).
Her total superannuation balance at 30 June 2024 does not reduce her remaining cap for 2024-25, since it is below $1.9 million (the general transfer balance cap for 2024-25).
Laura is able to contribute up to the remaining cap of $150,000 in 2024-25.
Example 2 − Bring-forward triggered in 2023-24 (Table 2)
Year 1: On 30 June 2023, Paul’s total superannuation balance is $1.65 million (below the threshold of $1.68m to be eligible for a three-year bring-forward cap - see Table 2). On 1 July 2023, he contributes $250,000, triggering a three-year bring forward period.
Paul is able to make a further non-concessional contribution of up to $80,000 until 30 June 2026, subject to his total super balance each year.
Year 2: Paul’s total superannuation balance on 30 June 2024 is $1.85 million. This does not impact his ability to make non-concessional contributions in the 2024-25 financial year, as it is below the general transfer balance cap of $1.9 million. Paul makes the remaining $80,000 contribution in 2024-25.
Year 3: Paul will not be able to make non-concessional contributions in 2025-26 as he is still in a 3 year bring forward period, and he has used up the cap he was entitled to.
Example 3 − Bring-forward triggered in 2023-24 (Table 2)
Year 1: On 30 June 2023, Allan’s total superannuation balance is $1.7 million (below the threshold of $1.79m to be eligible for a two-year bring-forward cap - see Table 2). On 1 July 2023, he contributes $180,000, triggering a two-year bring forward period. $40,000 of his $220,000 bring-forward cap remains immediately after this contribution.
Year 2: On 30 June 2024, Allan’s total superannuation balance is $1.93 million (having increased with his contributions and earnings over the previous year). Allan’s remaining bring forward cap is $40,000 ($220,000 - $180,000). However, his non-concessional cap for 2024-25 is reduced to Nil as his total superannuation balance just prior to the start of 2024-25 is $1.9 million or more ($1.9m is the general transfer balance cap for 2024-25). Allan cannot use his remaining bring-forward cap of $40,000 in 2024-25 due to his total super balance.
Later: Paul cannot use his remaining $40,000 bring-forward cap in 2025-26 as he is no longer in a bring-forward period (he only qualified for a 2 year bring-forward in 2023-24).
Whether Allan can trigger a new bring-forward period in 2025-26 will depend on his total super balance at 30 June 2025 and the thresholds that apply in 2025-26 (yet to be announced).
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Disclaimer
The information contained in this update is based on the understanding Avanteos Investments Limited ABN 20 096 259 979, AFSL 245531 (AIL) and Colonial First State Investments Limited ABN 98 002 348 352, AFSL 232468 (CFSIL) has of the relevant Australian laws as at the article date. As these laws are subject to change you should refer to our website at www.cfs.com.au or talk to a professional adviser for the most up-to-date information. The information is for adviser use only and is not a substitute for investors seeking advice. While all care has been taken in the preparation of this document (using sources believed to be reliable and accurate), no person, including AIL, nor CFSIL, accepts responsibility for any loss suffered by any person arising from reliance on this information. This update is not financial product advice and does not take into account any individual’s objectives, financial situation or needs. Any examples are for illustrative purposes only and actual risks and benefits will vary depending on each investor’s individual circumstances. You should form your own opinion and take your own legal, taxation and financial advice on the application of the information to your business and your clients.
Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information.
AIL and CFSIL are also not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.