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Maximise Your Concessional Superannuation Contributions

Posted 7 Feb

Maximise Your Concessional Superannuation Contributions

If your Total Super Balance (TSB) is less than $500,000, a new rule introduced in the 2016 Federal Budget means you are now able to carry forward any unused concessional contributions from prior years into following years. This allows you to maximise the tax benefits of contributing the upper limit concessional amount.

This new rule will be particularly useful for people who receive larger income than usual in some years, perhaps because of the sale of an investment property.  This also gives some flexibility to contribute when cash flow permits.  Unused balances can only be carried forward for up to five years, however once your Total Super Balance (TSB) reaches $500,000 you will no longer be permitted to carry forward unused amounts.

The new rule applies from 1 July 2018, which means the 2020 financial year is the first year in which you can top-up your super contributions by the carry forward amount. For example, in the 2020 financial year, any unused concessional contributions from 2019 may be utilised to top up your concessional contributions. In 2021, there will be two years of unused balance available to carry forward and so on, up to a maximum of five years balance to carry forward in the 2024 financial year.

What are Concessional Contributions?

Concessional superannuation contributions are those made to your super fund before tax. This includes compulsory employer superannuation guarantee contributions, additional employer before-tax super and salary sacrifice amounts.  It may also include personal contributions you make as tax deductions.

Concessional Contributions Checklist

  • Was your Total Super Balance (TSB) less than $500,000 at 30 June?  Your TSB is the total of all your superannuation holdings.  This information may be accessible on your MyGov account (if linked to the ATO).
  • What is the total of your concessional contributions to super since 1 July 2018?  You unused concessional contribution balance may also be accessed on your MyGov account.
  • If you have unused concessional contributions available, you may be eligible to bring forward some, or all of your unused concessional contributions.
  • To ensure your super fund will allocate superannuation payments in the financial year intended, always make payments at least a week before the end of the financial year.

Get advice before making extra contributions

It is very important to obtain financial advice before making additional contributions to your super, as the above strategy of bringing forward concessional contributions may lead to an adverse tax result in certain circumstances.

If you have any questions on maximising your concessional contributions – do not hesitate to get in touch with me or your WDF Professional contact. Phone 02 6921 5444 or email mplane@wdf.com.au.

Malcolm Plane

Superannuation Specialist




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