How do I know if I have carry-forward concessional contributions to use this year?

Created on December 16, 2020 5:03 pm

We often get the question from clients as to whether they can catch up concessional contributions that they did not maximise in past years. Depending on your concessional contribution history since 1 July 2018 and whether your total super balance is less than $500,000 as at 30 June the preceding year, it is definitely possible now.

How does it work?

Individuals can make additional concessional contributions by utilising their unused concessional contributions caps on a 5-year rolling basis, as long as their total super balance was less than $500,000 on the 30 June just before the start of that financial year.

The first year in which you can increase your concessional contributions cap by the amount of unused cap is 2019–20, but only if you have a total superannuation balance of less than $500,000 at 30 June 2019.

Concessional contributions include:

  • the 9.5% superannuation guarantee
  • salary sacrificed contributions; and
  • personal deductible contributions which have satisfied s.290-170 ITAA 1997.

How much extra can I contribute?

For the financial year ending

Unused caps from these financial years which can be applied

Maximum* concessional contributions cap with carry forward rule and including the actual year as well

2019-20

only 2018-19

$25,000 to $50,000

2020-21

only 2018-19 & 2019-20

$25,000 to $75,000

2021-22

only 2018-19 to 2020-21

$25,000 to $100,000

2022-23

only 2018-19 to 2021-22

$25,000 to $125,000

From 2023-24

only 2018-19 to 2022-23

$25,000 to $150,000

* this may differ if a contribution reserving strategy has been used in the previous or current year

Any amounts carried forward but not used after 5 years will expire.

Case Study

Stephen is aged 39 and his employer made superannuation guarantee contributions of $5,000 into his SMSF in 2018-19 as he’s been working part-time whilst being a ‘stay-at-home-Dad’. He didn’t make any personal concessional contributions to his fund.

The concessional contribution cap for the 2018-19 financial year was $25,000 so his unused concessional contribution cap was $20,000.

Between 2018-19 and 2023-24 financial years, Stephen’s concessional contributions and available unused concessional contribution caps are below:

 

2018-19

2019-20

2020-21

2021-22

2022-23

2023-24

Concessional contributions

$5,000

$5,000

$5,000

$5,000

$5,000

$40,000

Available unused cap

$20,000

$20,000

$20,000

$20,000

$20,000

$0

Cumulative available unused cap

$20,000

$40,000

$60,000

$80,000

$100,000

$80,000

2023-24 financial year

On 30 June 2023, Stephen has a total superannuation balance of less than $500,000.

In the 2023-24 financial year, Stephen makes a personal concessional contribution of $35,000 in addition to his employer’s concessional superannuation guarantee contribution of $5,000 on his behalf.

Assuming the concessional contribution cap remains at $25,000 (for the financial years from 2018-19 to 2023-24), Stephen will have exceeded this cap by $15,000 ($40,000 less $25,000 cap). However, he is able to increase his concessional contribution cap in the 2023-24 financial year by using $15,000 of the $20,000 unused concessional contributions cap from the 2018-19 financial , with the remaining $5,000 unused cap expiring in the 2023-24 financial year

2024-25 financial year

In the 2024-25 financial year, Stephen makes a personal concessional contribution of $25,000 in addition to his employer’s concessional superannuation guarantee contribution of $5,000 on his behalf. His total superannuation balance was still less than $500,000 as at 30 June 2024. Stephen’s concessional contributions and available unused concessional contribution caps are now:

 

2019-20

2020-21

2021-22

2022-23

2023-24

2024-25

Concessional contributions

$5,000

$5,000

$5,000

$5,000

$40,000

$30,000

Available unused cap

$20,000

$20,000

$20,000

$20,000

$0

$0

Cumulative available unused cap

$20,000

$40,000

$60,000

$80,000

$80,000

$75,000

Assuming the concessional contribution cap remains at $25,000, Stephen will have exceeded this cap by $5,000 ($30,000 less $25,000 cap) during 2024-25. However, he is able to increase his concessional contribution cap in the 2024-25 financial year by using $5,000 of the $20,000 unused concessional contributions cap from the 2019-20 financial year. The remaining $15,000 unused cap will expire and cannot be carried forward because it would be outside the five year carry forward period in the 2025-26 financial .