The release of the December 2023 AWOTE data last month confirmed what we’ve all known for a very long time – the cost of living is still high and wages growth has been slow – but finally, the latter has triggered an increase in the superannuation contribution caps from 1 July 2024.
As such, the timing of making additional contributions before 30 June 2024 is more important than ever as this may impact an individual’s contribution caps for the next financial year with the higher limits.
So, what are the new contribution caps?
Concessional Contributions
From 1 July 2024 the concessional contribution cap will increase from $27,500 to $30,000.
What does this mean for Catch-up / “Unused” concessional contributions cap?
The current financial year will be the last year to use any unused concessional contribution cap amounts from 2019/20 – that is, it’s use it or lose it.
| Financial year | 2019/20 | 2020/21 | 2021/22 | 2022/23 | 2023/24 | 2024/25 |
| Cap | $25,000 | $25,000 | $27,500 | $27,500 | $27,500 | $30,000 |
To be eligible for catch-up concessional contributions the individual’s Total Super Balance must be less than $500,000 on 30 June 2023.
The best way to check if you have any unused concessional contribution caps from previous years is via your myGov login or your personal tax agent.
Non-Concessional Contributions
Although the contribution caps are increasing it’s important to highlight that the General Transfer Balance Cap won’t be increasing (as this is linked to inflation as opposed to wages), so this makes for some fun times ahead.
So from 1 July 2024 the non-concessional contribution caps and thresholds will be:
| Current financial year (2023/24) – based on TSB at 30 June 2023 | Next financial year (2024/25) – based on TSB at 30 June 2024 | |||
| Less than $1.68m | $330,000 (3 years) | Less than $1.66m | $360,000 (3 years) | |
| $1.68m – less than $1.79m | $220,000 (2 years) | $1.66m – less than $1.78m | $240,000 (2 years) | |
| $1.79m – to less than $1.9m | $110,000 | $1.78m – to less than $1.9m | $120,000 | |
| $1.9m or more | $0 | $1.9m or more | $0 | |
What happens if I’ve previously triggered my non-concessional contributions caps?
If you already triggered the 2-year bring forward rule in the previous or current financial year, then you do not get access to the increased non-concessional cap in 2024/25.
For example, you will still be able to contribute up to your remaining non-concessional cap space by 30 June 2024 if:
- you triggered the bring forward in 2021/22 or 2022/23; and
- your Total Super Balance was less than $1.9m on 30 June 2023.
If I haven’t utilised the bring forward should I trigger it before 30 June 2024 or wait until after 1 July 2024?
As contribution caps are based on a member’s Total Super Balance at 30 June of the previous financial year, the answer to this question is not black and white. Considerations include:
- is it likely that Total Super Balance will be close to the $1.66m threshold on 30 June 2024?
- am I about to turn 75 and if so, is it before or after 30 June 2024?
Depending on your circumstances different options are available to maximise non-concessional contributions over the next few years such as (but not limited to) the following:
| 2023/24 | 2024/25 | 2025/26 | 2026/27 | Total | |
| Option 1 | $110,000 | $360,000 | $0 | $0 | $470,000 |
| Option 2 | $110,000 | $120,000 | $360,000 | $0 | $590,000 |
| Option 3 | $130,000 | $0 | $0 | $360,000 | $690,000 |
| Option 4 | $110,000 | $120,000 | $120,000 | $360,000 | $710,000 |
With all contribution strategies, not only is it important to meet the eligibility criteria before making a contribution, but the timing of them can also have a significant impact on future contribution caps.
If you have any queries in relation to the superannuation caps please contact your client manager to discuss.
Author: Anna Wong – Senior SMSF Manager at Premier SMSF Solutions
*Correct as of 27 March 2024
*Disclaimer – Kreston Stanley Williamson has produced this article to serve its clients and associates. The information contained in the article is of general comment only and is not intended to be advice on any particular matter. Before acting on any areas in this article, you must seek advice about your circumstances. Liability is limited by a scheme approved under professional standards legislation.
