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  • Lowering the non-concessional (post-tax) contributions cap to $100,000 per annum

    Effective 1 July 2017, the government lowered the annual non-concessional (after tax) contribution cap from $180,000 to $100,000 per year for the 2017-18 and future financial years. This is available to members between 65 and 74 years old if they meet the work test. The cap will be indexed in line with the concessional contributions caps.

    Members with a total superannuation balance greater than or equal to the general transfer balance cap ($1.6 million for the 2017-18 financial year) at the end of 30 June of the previous financial year, and makes non-concessional contributions, will have excess non-concessional contributions.

    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 will depend 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:

    • the individual must be under 65 years of age for one day during the triggering year (the first year)
    • they must contribute more than the annual cap ($100,000 for the 2017-18 financial year)
    • the difference between the general transfer balance cap ($1.6 million for the 2017-18 financial year) and their total superannuation balance must be greater than the general non-concessional contributions cap ($100,000 for the 2017-18 financial year) at the end of 30 June of the previous financial year – for the 2017-18 financial year this means that they must have a total superannuation balance 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 their 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 the individual's 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
    • 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.

    For the 2017-18 year 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

    Nil

    N/A

    See also:

    Summary of impacts for self-managed super funds

    • There will be additional reporting requirements.
    • Funds will now send monies to us.
    • There is the potential for different release authority products.

    Transitional period

    If an individual has made a non-concessional contribution in 2015-16 or 2016-17 financial year and that triggers the bring forward, but has not fully used their bring forward before 1 July 2017, transitional arrangements will apply so that the amount of bring forward available will reflect the reduced annual contribution caps.

    Last modified: 28 Nov 2017QC 51301