• Non-concessional contributions cap

    For 2007-08 and 2008-09 the non-concessional contributions cap was three times the concessional contributions cap, in accordance with subsection 292-85(2)External Link.

    The non-concessional contributions cap was increased to six times the concessional contributions cap for 2009-10 and later years.

    The increase to six-times was due to the government reducing the concessional contributions cap for 2009-10 and later years but wanting to maintain the non-concessional contributions cap at the same level.

    Table 3: Non-concessional contributions caps

    Financial year Cap amount

    2013-14

    $150,000

    2012-13

    $150,000

    2011-12

    $150,000

    2010-11

    $150,000

    2009-10

    $150,000

    2008-09

    $150,000

    2007-08

    $150,000

    Attention

    The non-concessional contributions cap will reflect the indexation of the concessional contributions cap.

    End of attention

    Excess non-concessional contributions are taxed at a rate of 46.5% in accordance with section 5External Link of the Superannuation (Excess Non-Concessional Contributions Tax) Act 2007.

    Attention

    The tax is imposed on the person who must withdraw an amount from one or more of their super funds so that the total is equal to the tax liability.

    End of attention

    In accordance with subsection 292-20(3)External Link of the IT(TP)A, if a person is over 50 years old as at 30 June and qualifies for the higher concessional contributions cap, they cannot use this higher concessional cap amount to calculate their non-concessional contributions cap. That is, the non-concessional contributions cap is calculated on the concessional contributions cap for people less than 50 years old only.

    Bring-forward

    If a person is younger than 65 at any time in a financial year they can bring forward the next two years of non-concessional contributions, but certain conditions apply. This means they can contribute up to $450,000 over a three year period.

    The bring-forward is automatically triggered when a person's non-concessional contributions exceed $150,000 in an income year.

    Once this happens, the normal non-concessional contributions cap does not apply to the next two years. Instead, the total contributions over the next two years cannot exceed $450,000 minus the contributions made in the year the bring-forward was triggered.

    If a person is 63 or 64 years old at the end of an financial year and they take advantage of the bring-forward, they are not required to meet the work test in either of the following two financial years.

    65 years old or over

    If a person is 65 years old or older on 1 July, they cannot access the bring-forward provision. Their non-concessional contributions cap is $150,000.

    People who are 65 to 74 years old will have a non-concessional contributions cap of $150,000 per year, provided they satisfy the work test set out in the SISR.

    Not allowing people over 65 to bring forward entitlements to non-concessional contributions will ensure people do not inadvertently breach the cap by failing to meet the work test in the following two financial years.

    Attention

    All non-concessional contributions to all super accounts during a financial year count towards the non-concessional contributions cap.

    End of attention

    Table 4: The operation of the bring-forward

    Year Scenario 1 Scenario 2 Scenario 3 Scenario 4

    Year 1

    Less than $150,000

    Bring-forward not triggered in this year.

    Between $150,001 and $449,999

    Bring-forward triggered in this year.

    $450,000

    Entire bring-forward entitlement used in this year.

    More than $450,000

    A tax liability for the excess in this year.

    Year 2

    Up to $150,000 per year or $450,000 over three years.

    Up to the difference between contributions in Year 1 and $450,000 over Years 2 and 3.

    Additional non-concessional contributions before Year 4 will exceed the cap and result in a tax liability.

    Additional non-concessional contributions before Year 4 will exceed the cap and result in a further tax liability

    Year 3

    Year 4

    Up to $150,000 per year or $450,000 over three years.

    Up to $150,000 per year or 450,000 over three years.

    Up to $150,000 per year or $450,000 over three years.

    Example: under 65

    Linda is 64 years old and makes non-concessional contributions of $450,000 to her super funds in the 2010-11 financial year.

    Linda does not have to satisfy the work test in either of the following two financial years (that is, 2011-12 and 2012-13) for the $450,000 contributions made under the bring-forward provisions.

    From 2011-12, being 65 years old, Linda must satisfy the work test to make new, additional contributions. Any additional non-concessional contributions Linda makes before 1 July 2013 will be in excess of her cap and will result in a tax liability.

    If Linda satisfies the work test in the 2012-13 financial year she will have a non-concessional contributions cap of $150,000 for that year. Contributions in excess of $150,000 will exceed her cap and will result in a tax liability.

    Being over 65 years old, she will not be able to bring forward future entitlements to increase her cap (as she did in the 2010-11 income year).

    End of example
    Example: over 65

    Bernard was 65 years old on 1 July. Therefore, his non-concessional contributions cap amount is $150,000 per year.

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

    • $100,000 in October
    • $100,000 in April.

    As he is not eligible for the bring-forward, Bernard has exceeded his non-concessional contributions cap by $50,000.

    He is liable to pay excess non-concessional contributions tax on that amount.

    End of example
    Example: bring-forward

    Sandra is 53 years old and contributes $160,000 non-concessional contributions to her super fund during the financial year.

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

    Sandra can contribute up to $290,000 (that is, $450,000 - $160,000 = $290,000) non-concessional contributions over the next two financial years without paying the excess non-concessional contributions tax.

    End of example
    Example: impact on indexing

    Alan (60 years old) makes a non-concessional contribution of $450,000 to his super fund in one hit. This triggers the bring-forward.

    During the next two financial years Alan cannot make any more non-concessional contributions to his super without incurring excess non-concessional contributions tax ($450,000 - $450,000 = $0).

    If a bring-forward has been triggered, the two future years' entitlements are not indexed.

    For example, further to the above example, if the non-concessional contributions cap in the third year changed to $180,000, Alan cannot contribute an extra $30,000 without exceeding the cap.

    End of example
    Example: conditions for bring-forward

    Helen is 64 years old at 1 July 2009 (turns 65 years old in November 2009), and makes a non-concessional contribution of $160,000 to her super fund in the 2009-10 financial year.

    Helen is entitled to use the remaining bring forward cap balance of $290,000 ($450,000 - $160,000 = $290,000) over the next two financial years even though she has turned 65, however she must ensure that the following conditions are met:

    • She meets the work test to be eligible to contribute to her super fund.
    • She makes the $290,000 contribution in at least two separate payments, with each payment not exceeding the fund-capped contributions limit of $150,000 - for more information on fund-capped contribution limits, see Fund-capped contribution limit.
    End of example
      Last modified: 22 Nov 2013QC 34181