Show download pdf controls
  • Non-concessional contributions

    Non-concessional contributions are made into your super fund from after-tax income. These contributions are not taxed in your super fund.

    There are caps on the non-concessional contributions you can make each financial year.

    From 1 July 2017, the annual non-concessional (after tax) contribution cap will reduce from $180,000 to $100,000 per year. This will remain available to individuals between 65 and 74 years old if they meet the work test. The cap will be indexed in line with the concessional contributions caps.

    If you exceed your non-concessional contributions cap in a financial year, you must lodge an income tax return for that year, and you may have to pay extra tax.

    Additionally, from 1 July 2017 your non-concessional cap will be nil for a financial year if you have a total superannuation balance greater than or equal to the general transfer balance cap ($1.6 million in 2017–18) at the end of 30 June of the previous financial year. In this case if you make non-concessional contributions in that year, you will have excess non-concessional contributions.

    Contributions and defined benefit interests

    Individuals with a defined benefit interest, who have a total superannuation balance greater than or equal to $1.6 million at the end of the previous financial year, may still be required to make non-concessional contributions under an industrial or other workplace agreement. These will be excess non-concessional contributions and may not be able to be released depending on the rules of your fund.

    Where the excess amounts cannot be released from any of your superannuation interests you will be assessed for excess non-concessional contributions tax which you will need to pay from your own sources.

    Examples: Excess non-concessional contributions and defined benefit funds

    Chris' total superannuation balance at 30 June 2017 is $1.65 million, which reduces his non-concessional contribution cap for 2017–18 to nil.

    Chris is a member of a defined benefit fund and must make mandatory non-concessional contributions to his super fund during 2017–18. As Chris has a nil non-concessional contribution cap, all of these mandatory contributions will be excess non-concessional contributions.

    Chris' individual income tax return and fund contribution reporting are received by us on 25 September 2018 and Chris is issued an excess non-concessional contribution determination.

    Chris makes an election to release the excess amount from his only fund. Chris' fund is unable to release the amount as he is the member of a defined benefit fund.

    Chris is notified that the excess could not be released and is issued an excess non-concessional contributions tax assessment. Chris has 21 days to pay this liability from his own sources.

    Table 2: Non-concessional contribution caps

    Financial year

    Non-concessional cap

    Tax on amounts over cap

    2017–18

    $100,000

    47%

    2016–17

    $180,000

    47% (plus 2% budget repair levy)

    2015–16

    $180,000

    47% (plus 2% budget repair levy

    2014–15

    $180,000

    47% (plus 2% budget repair levy)

    2013–14

    $150,000

    46.5%

    Types of non-concessional contributions include:

    • contributions you make, or your employer makes on your behalf, from your after-tax income
    • contributions your spouse makes to your super fund (unless your spouse makes the contributions because they’re your employer)
    • personal contributions not claimed as an income tax deduction
    • excess concessional (before-tax) contributions you have not elected to release from your super fund
    • contributions over your capital gains tax (CGT) cap amount
    • retirement benefits you withdraw from your super fund and 're-contribute' to super
    • most transfers from foreign super funds (including New Zealand KiwiSaver contributions), but excluding amounts included in your fund's assessable income.

    Your age affects your non-concessional contributions cap, how the cap applies, and what options you may have.

    From 1 July 2017, there is no limit on the amount of contributions your fund can accept for you; however, there are still limits on the type of contributions your fund can accept for you if you are 65 years or older.

    Next step:

    • To find out how much you contributed into your super fund to ensure you don’t exceed super contribution caps, contact us on 13 10 20.

    Exclusions

    Some personal contributions may be excluded from counting towards your non-concessional contributions cap for a financial year.

    Exclusions include contributions:

    • made from personal injury payments (also known as structured settlement payments)
    • you chose to count towards your CGT cap that have not gone over your lifetime limit.

    These types of non-concessional contributions are only excluded if you meet all the conditions.

    You must specifically ask your fund to exclude them, by providing your fund with a Capital gains tax cap election or Contributions for personal injury form before or when you make a contribution.

    Note: If you take money out of super and put it back later, it counts as a new non-concessional contribution.

    When working out your super contributions for the financial year, remember: contributions don't count when the payment is sent, they only count once the payment is received by your fund.

    Make sure your fund receives all your contributions by 30 June.

    Bring-forward arrangements

    Individuals 64 years old or younger

    If you are under 65, you may be able to make non-concessional contributions of up to three times the annual non-concessional contributions cap in a single year. If eligible, when you make contributions greater than the annual cap, you automatically gain access to future year caps. This is known as the bring-forward arrangement.

    From 1 July 2017, the non-concessional contributions cap amount that you can bring forward, and whether you have a two or three year bring forward period, depends on your total superannuation balance. Your total superannuation balance is determined at the end of 30 June of the previous financial year in which the contributions that triggered the bring forward, were made.

    For 2017–18 onwards to access the non-concessional bring forward arrangement:

    • you must be under 65 years of age for one day during the triggering year (the first year)
    • you must contribute more than the annual cap ($100,000 for 2017–18)
    • your total superannuation balance at the end of 30 June of the previous financial year must be less than the general transfer balance cap ($1.6 million for 2017–18) with a capacity greater than the annual non-concessional contribution cap ($100,000 for 2017–18). Therefore for 2017–18 you must have a total superannuation balance as at the end of 30 June 2017 of less than $1.5 million to be able to access the bring-forward arrangement.

    For 2017–18 onwards, the remaining cap amount for years two or three of a bring forward arrangement is reduced to nil for a financial year if your total superannuation balance is greater than or equal to the general transfer balance cap at the end of 30 June of the previous financial year.

    How the bring-forward arrangement works:

    • If the difference between the general transfer balance cap and your total superannuation balance is between one and two times the general non-concessional contributions cap for the first year – the amount is twice the general non-concessional contributions cap over a two year period.
    • If the difference between the general transfer balance cap and your superannuation balance is greater than two times the general non-concessional contributions cap for the first year – the amount is three times the general non-concessional contributions cap over a three year period.

    Note: Unreleased excess concessional (before-tax) contributions count towards the non-concessional (after-tax) contributions cap.

    From 1 July 2017 there are no limits on the amount of contributions your fund can accept for you.

    For 2017–18 the following table represents the bring-forward arrangement for the first year.

    2017–18 Bring forward period

    Total superannuation balance on 30 June 2017

    Non-concessional contributions cap for the first year

    Bring-forward period

    Less than $1.4 million

    $300,000

    3 years

    $1.4 million to less than $1.5 million

    $200,000

    2 years

    $1.5 million to less than $1.6 million

    $100,000

    No bring forward period, general non-concessional contributions cap applies

    $1.6 million or more

    Nil

    n/a

    Examples: Excess non-concessional contributions

    Sandra is 53 years old and contributes $160,000 non-concessional contributions to her super fund during 2013–14.

    This triggers the bring-forward arrangement, as it exceeds the non-concessional contributions cap of $150,000.

    Sandra can contribute up to $290,000 ($450,000 less $160,000) non-concessional contributions over the next two financial years without exceeding the non-concessional contributions cap.

    End of example

     

    Example: A single contribution

    Alan is 60 years old and makes a single non-concessional contribution of $540,000 to his super fund in 2014–15. This triggers the bring-forward arrangement as it exceeds the non-concessional contribution cap of $180,000.

    During the next two financial years, Alan can't make any more non-concessional contributions to his super funds without exceeding the non-concessional contributions cap as his remaining cap space is nil ($540,000 less $540,000).

    End of example

     

    Example: Effect on the following year

    Austin is 42 years old and makes non-concessional contributions of $180,000 in 2014–15.

    He forgot about $2,000 non-concessional contributions automatically direct debited into his fund from his bank account each year. As a result, Austin has $182,000 non-concessional contributions for 2014–15. This triggers the bring-forward arrangement.

    In 2015–16, Austin contributes a further $540,000. Austin's non-concessional cap for 2015–16 is $358,000 ($540,000 less $182,000). As a result, he made excess contributions of $182,000 in 2015–16 ($540,000 less $358,000).

    End of example

     

    Example: Re-contribution strategy

    John is 61 years old and makes a personal non-concessional contribution to his super fund of $200,000 in 2013–14. This triggers his bring-forward non-concessional cap of $450,000.

    In 2014–15, John is dissatisfied with the return on his super investments and decides to withdraw $300,000 of his super benefits to reinvest in a fixed-term deposit.

    In 2015–16, John decides to re-contribute the term deposit amount of $300,000 to his super fund.

    Because this will be counted as a new non-concessional contribution, John will exceed his non-concessional cap by $50,000.

    End of example

    Once you trigger the bring-forward arrangement in a year, any change to the non-concessional contributions cap for the bring-forward period doesn’t apply to you.

    For example, in John's case, although the non-concessional contributions cap in the second and third year of his bring forward changed to $180,000, he couldn’t contribute more than $250,000 without going over his cap

    Note: You can view your remaining bring forward cap balance using ATO Online services via myGovExternal Link.

    Individuals 65 years old or older

    If you are 65 years old or older on 1 July of the financial year you can't access the bring-forward provision. Your non-concessional cap is limited to $180,000 each year, or $100,000 from 2017–18.

    Note: Unreleased excess concessional (before-tax) contributions count towards the non-concessional (after-tax) contributions cap.

    Work test

    If you are 65–74 years old, you need to satisfy a work test in each financial year that a voluntary super contribution is made to your fund.

    The work test requires you to be gainfully employed. To satisfy the work test, you must work at least 40 hours during a consecutive 30-day period each financial year in which the contributions are made.

    Note: Unpaid work does not meet the definition of 'gainfully employed'.

    If you meet the work test, your fund can also accept:

    • other types of employer contributions, such as

    – voluntary contributions your employer may make, such as salary sacrifice contributions

    – other amounts paid by your employer to your super fund, such as administration fees and insurance premiums

    • other contributions made to your super fund, such as

    – personal contributions made by you

    – contributions made by someone other than you, such as your spouse.

    Examples: Not eligible for the bring forward provision

    Bernard is 65 years old on 1 July 2018. His non-concessional contributions cap is $100,000 for 2018–19 and his total superannuation balance on 30 June 2018 is $800,000.

    He made the following non-concessional contributions to his super fund during the financial year, after his birthday:

    • $75,000 in October 2018
    • $75,000 in April 2019.

    Bernard has made $150,000 non-concessional contributions in the financial year. Due to his age, Bernard is not eligible for the bring-forward arrangement.

    Bernard has exceeded his non-concessional contributions cap by $50,000 ($150,000 less $100,000).

    End of example

    See also:

    • If you’re not sure whether you meet the work test rules for superannuation non-concessional contributions, ask our CommunityExternal Link for help.

    Individuals 70 years old or older

    If you are 70 years old or older, your fund is able to accept compulsory employer contributions made to your super.

    If you are between 70 and 74 years old (inclusive) and meet a work test, your fund can accept certain other contributions.

    The work test requires you to be gainfully employed. To satisfy the work test, you must work for at least 40 hours during a consecutive 30-day period each financial year in which the contributions are made.

    Note: Unpaid work does not meet the definition of gainfully employed.

    If you meet the work test and are between 70 and 74 years old (inclusive), your fund can accept:

    • other types of employer contributions, such as          
      • voluntary contributions your employer makes, such as salary sacrifice contributions
      • other amounts paid by your employer to your super fund, such as administration fees and insurance premiums
    • personal contributions made only by you.

    If you're 75 years old or older, your fund can only accept compulsory super contributions made for you by your employer.

    Bring forward transitional period

    If you have triggered the bring-forward arrangement in 2015–16 or 2016–17, but you did not fully use your remaining bring-forward balance before 1 July 2017, transitional arrangements will apply. This means that the maximum amount of bring forward available will reflect the reduced annual contribution caps.

    If the bring forward arrangement was triggered in 2015–16, the transitional cap will be $460,000 ($180,000 for 2015–16, $180,000 for 2016–17 $100,000 for 2017–18). If the bring forward was triggered in 2016–17, the transitional cap will be $380,000 ($180,000 for 2016–17 and $100,000 for 2017–18 and $100,000 for 2018–19).

    Example 1: Bring forward transitional period

    John contributes $540,000 non-concessional contributions in the 2016–17 triggering the bring forward arrangement.

    From 1 July 2017 the general non-concessional contributions cap reduces from $180,000 to $100,000. This will reduce John's three year bring forward cap to $380,000 ($180,000 for 2016–17, $100,000 for 2017–18, $100,000 for 2018–19).

    Although John's non -concessional contribution of $540,000 would exceed this new bring – forward cap, as his contribution was made prior to 1 July 2017, he would not be deemed to be in excess of his non-concessional bring-forward cap. However, John will not be able to contribute any further non-concessional contributions under the bring-forward arrangement in the 2017–18 and 2018–19.

    Example 2: Bring forward transitional period

    Barry contributes $200,000 non-concessional contributions in 2016–17 triggering the bring-forward arrangement.

    From 1 July 2017 the general non-concessional contributions cap reduces from $180,000 to $100,000. This will reduce Barry's three-year total bring forward cap to $380,000 ($180,000 for 2016–17, $100,000 for 2017–18, $100,000 for 2018–19).

    Barry's remaining bring forward cap balance is now $180,000 ($380,000 less $200,000)

    The amount that Barry can contribute in 2017–18 and 2018–19 will now be dependent on his total superannuation balance at the end of 30 June 2017 and 30 June 2018.

    At the end of 30 June 2017, Barry's total superannuation balance is $1.3 million. Therefore, he is still eligible to make non-concessional contributions in 2017–18.

    On 10 November 2017, Barry makes non- concessional contributions of $150,000.

    Barry's remaining bring forward cap balance for 2018–19 would be $30,000, however, due to the growth in the fund, Barry's total superannuation balance at the end of 30 June 2018 is now over $1.6 million. Therefore, Barry's non-concessional cap for 2018–19 is now nil (based on the general transfer balance cap for 2018–19 being $1.6 million).

    Therefore, if Barry makes any non-concessional contributions in 2018–19 Barry will be in excess of his non-concessional contributions cap.

    Example 3: Bring forward transitional period

    In 2015–16 Elizabeth has the capacity to contribute non-concessional contributions of $540,000, however she only contributed $250,000 non-concessional contributions triggering the bring-forward arrangement.

    From 1 July 2017, the general non-concessional contributions cap reduces from $180,000 to $100,000. This will reduce Elizabeth's three- year total bring forward cap to $460,000 ($180,000 for 2015–16, $180,000 for 2016–17, $100,000 for 2017–18).

    Elizabeth's remaining bring forward cap balance is now $210,000 ($460,000 cap minus her non- concessional contributions of $250,000).

    The amount that Elizabeth can contribute in 2017–18 and will now be dependent on her total superannuation balance at the end of 30 June 2017 and the general transfer cap.

    On 15 October 2017, Elizabeth makes non concessional contributions of $100,000.

    Elizabeth's remaining bring forward cap balance for 2017–18 is $110,000.

    At the end of 30 June 2017 Elizabeth's total superannuation balance is $650,000. Therefore, she is still eligible to make non-concessional contributions in 2018–19.

    On 30 April 2018, Elizabeth makes non-concessional contributions of $110,000.

    Elizabeth has now used all her non-concessional remaining bring forward balance. If Elizabeth makes any further non-concessional contributions in 2017 18, Elizabeth would be in excess of her non-concessional contributions cap.

    End of example
    Table 3: Yearly caps for the period 2014–15 to 2019–20

    Year

    2014–15

    2015–16

    2016–17

    2017–18

    2018–19

    2019–20

    Yearly cap

    $180,000

    $180,000

    $180,000

    $100,000

    $100,000

    $100,000

    Table 4: Transitional contributions cap limits for the period 2014–15 to 2019–20

    Years

    2014–15 to 2016–17

    2015–16 to 2017–18

    2016–17 to 2018–19

    2017–18 to 2019–20

    Three-year bring forward cap amounts

    0 to $540,000

    0 to $460,000

    0 to $380,000

    0 to $300,000

    Note: To make sure you don't accidentally trigger the bring-forward arrangement, you will need to take into account all your contributions made to all your super funds. Unreleased excess concessional (before-tax) contributions also count towards the non-concessional (after-tax) contributions cap.

    Life insurance premiums and fund fees can count as contributions too. Consider these when planning your contributions.

    Next steps:

    • If you are unsure if you previously triggered the bring-forward provision, or you are considering making a large contribution, phone us on 13 10 20
    • View your remaining bring forward cap balance using ATO online services via myGovExternal Link
      Last modified: 08 Aug 2018QC 19749