Super contribution opportunities

Super contribution opportunities

If you are looking to increase your super, and are under age 75, then a good way is through making non-concessional contributions. Recent changes to legislation have provided greater opportunities for additional non-concessional super contributions that may help you in building your super balance.

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.

Making non-concessional contributions not only increases your investment wealth in a tax-advantaged environment, it also is a great estate planning strategy, as no tax is payable on this amount when you die regardless of whom it is paid to.

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 in order to make a non-concessional contribution 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.

If you are approaching 75 years of age, it is important to contact your Financial Planner urgently, as strict age limits apply.

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, especially for people with defined benefit components, 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 $1.9m. This increase in the total super balance threshold means there are more opportunities to make non concessional contributions under the bring forward rule from this financial year onward.

This is because in the year the bring forward contribution is triggered, the increased total super balance thresholds allow greater opportunities to make larger non-concessional contributions as outlined in the below table.

Total super balance at 30 June 2023Non-concessional contributions available in 2023/24
Less than $1.68m (previously $1.48m)Up to $330,000
At least $1.68m but less than $1.79m (previously $1.59m)Up to $220,000
At least $1.79m but less than $1.9m (previously $1.7m)Up to $110,000
$1.9m or greater (previously $1.7m)Nil

These rules are complicated, so it's important to seek professional financial advice.