Concessional Contributions Cap and Carry-Forward Provisions Applicable to Superannuation

Annual Concessional Contributions Cap

From 1 July 2024, the annual concessional contributions cap is $30,000. This cap applies to:

• Employer contributions, including Superannuation Guarantee (SG) and salary sacrifice arrangements.

• Personal contributions claimed as a tax deduction.

Carry-Forward of Unused Cap Amounts

The carry-forward rule allows individuals to make additional concessional contributions above the annual cap by using unused cap amounts from up to five previous financial years. These unused amounts accumulate if the individual did not fully utilise their concessional cap in those years. The unused cap amounts are tracked by the ATO and applied automatically when the individual exceeds the current year’s cap. The oldest unused amounts are applied first, and any unused cap expires after five years. This mechanism provides flexibility for individuals to make larger contributions in years when they have the financial capacity to do so, subject to eligibility.

Eligibility Criteria

To utilise the carry-forward rule, an individual must satisfy all of the following conditions:

1. Have unused concessional cap amounts from any financial year starting from 2018–19.

2. Have a Total Superannuation Balance (TSB) of less than $500,000 at 30 June of the previous financial year.

3. Be eligible to make super contributions in the current financial year (generally under age 75).

4. If aged 67 or older, must meet the work test or be eligible for the work test exemption to claim a tax deduction for personal contributions.

5. Contributions must be received by the super fund within the financial year to count towards the cap.

Impact of Total Superannuation Balance (TSB)

The TSB threshold of $500,000 is a critical determinant of eligibility for the carry-forward rule.
If an individual’s TSB equals or exceeds $500,000 at 30 June of the previous financial year, they are not eligible to access unused concessional cap amounts from prior years.
In such cases, the individual is restricted to the standard annual cap of $30,000.

Example

Consider the following scenario:

In the 2020–21 financial year, an individual had a TSB of $505,000 and unused concessional cap amounts of $67,000.

Due to the TSB exceeding $500,000, the individual was not eligible to use the carry-forward provisions.

In the 2021–22 financial year, the same individual’s TSB dropped to $490,000.
With unused cap amounts of $94,500, the individual became eligible to make additional concessional contributions up to that amount.

Accessing Information

Individuals can view their available carry-forward amounts and TSB via myGov by navigating to: ATO → Super → Carry forward concessional contributions.