Carry forward concessional contributions

It is important to inform your clients in relation to carry forward concessional contributions. From 1 July 2018, members who have a total superannuation balance of less than $500,000 on 30 June the previous financial year, may be entitled to contribute more than the concessional contributions cap. Unused contributions for eligible members can be made from 1 July 2019.

Please refer to the following table.

INCOME YEAR MAXIMUM* CC CAP WITH CARRY FORWARD RULE
2019-20 $25,000 to $50,000
2020-21 $25,000 to $75,000
2021-22 $25,000 to $100,000
2022-23 $25,000 to $125,000
From 2023-24 $25,000 to $150,000
*Reserving strategies could increase this figure for a given financial year.

It is important to note that members can access their unused concessional contributions caps on a rolling basis for five years. Amounts carried forward that have not been used after five years will expire.

With the 10% rule being removed from 1 July 2017, this widened the scope for fully salaried employees to make personal concessional (tax deductible) contributions up to the concessional cap on top of their employer concessional contributions. Members who qualify can already make a personal concessional (tax deductible) contribution up to $50,000 for the 2019/20 financial year. Moving forward, members who have a total super balance under $500,000 at 30 June 2023, could potentially make a personal concessional (tax deductible) contribution of up to $150,000 in the 2023/24 financial year if they had not made any concessional contributions in the previous four financial years (or up to $175,000 concessional with a reserving strategy).

Additional employer concessional contributions can also be made up to the concessional cap eligible members, which could encourage strategies for salary sacrifice or additional contributions from related employers.

With appropriate planning, the personal tax benefits to members could be significant and also presents the opportunity to boost superannuation savings for your clients who have little to no superannuation savings. Please ensure your clients are aware of this and contact your PWG advisor should you need assistance in preparing any strategies.

How can Partners Wealth Group help?

If you have any questions, require assistance or would like further clarification on any aspect of your clients’ needs, contact John Lethbridge today on 1800 333 143 to discuss your specific requirements.