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  • Non-concessional contributions and contribution caps

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

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    About non-concessional contribution caps

    From 1 July 2021, the non-concessional contributions cap is being increased to $110,000 as a result of indexation in line with average weekly ordinary time earnings (AWOTE). If you contribute more, you may have to pay extra tax

    From 1 July 2017 to 30 June 2021, the non-concessional contributions cap is $100,000.

    Your own cap might be different. It can be:

    If you take money out of your super and put it back later, it counts as a new non-concessional contribution, unless you have claimed and been allowed this amount as a tax deduction.

    If you have more than one fund, the total of all non-concessional contributions made to all your funds during a financial year count towards your non-concessional contributions cap.

    We provide tips to help you avoid exceeding the non-concessional contributions cap.

    If you exceed your non-concessional contributions cap, we will let you know and tell you what your options are to pay the extra tax.

    You must also lodge a tax return for that year if you exceed your cap.

    Types of non-concessional contributions

    There are many types of non-concessional contributions including:

    Some types of contributions may not be able to be accepted by your super fund, depending on your age and work status (see Acceptance of member contributions and work test).

    Exclusions

    The following types of contributions do not count towards your non-concessional contributions cap:

    These types of 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 relevant form before or when you contribute.

    Government co-contributions are also not counted as non-concessional contributions. You don't have to take any action for these to be excluded.

    Individuals with a defined benefit interest

    If you’re a member of a defined benefit fund, you are usually required to make contributions which impact your defined benefit interest. These will generally count towards your non-concessional contributions cap, even if your employer made the contributions on your behalf.

    If you are uncertain about which contributions are non-concessional, you should contact your fund.

    You may still have to make compulsory non-concessional contributions under an industrial or other workplace agreement, even if your non-concessional contributions cap is nil (because your total super balance is greater than or equal to the general transfer balance cap at 30 June of the previous financial year). In this scenario, these contributions:

    • will be excess non-concessional contributions
    • may not be able to be released, depending on the rules of your fund.

    If your total super balance is less than the general transfer balance cap these compulsory contributions will:

    • not necessarily mean you will exceed your non-concessional cap
    • may limit your ability to make other non-concessional contributions without having to pay extra tax.

    If you have excess contributions that cannot be released from any of your super funds you will be assessed for excess non-concessional contributions tax. You will need to pay this from your own money.

    As defined benefit funds can have different rules, you will need to contact your fund to understand your options.

    You may be able to avoid exceeding your non-concessional contributions cap by:

    • stopping your contributions
    • reducing your contribution rate
    • making contributions under a salary sacrifice arrangement so they become concessional contributions. This will need your employer's approval.

    You will need to carefully consider the impact of reducing these contributions to nil or below certain thresholds as advised by your fund, as this may impact your:

    • defined benefit
    • other benefits offered by your fund, such as insurance.

    You will also need to carefully consider the consequences of making these contributions as salary sacrifice contributions as they may result in you exceeding your concessional contributions cap.

    For information on unfunded defined benefits see contributions to an unfunded defined benefit fund – non-concessional contributions.

    See also Effect of not releasing your excess concessional contributions from super.

    Example: excess non-concessional contributions and defined benefit funds

    Chris' total super balance at 30 June 2019 is $1.65 million. This reduces his non-concessional contributions cap for 2019–20 to nil.

    However, Chris is a member of a defined benefit fund and it is mandatory for him to make non-concessional contributions to his super fund during 2019–20. As Chris has a nil non-concessional contributions cap, all the mandatory contributions will be excess non-concessional contributions.

    We receive:

    • Chris' individual tax return on 25 September 2020
    • his fund's annual contribution reporting on 30 October 2020.

    We issue Chris with an excess non-concessional contribution determination.

    Chris makes an election to release the excess amount from his only fund. However, Chris' fund does not release the amount because he is a member of a defined benefit fund and his fund does not have to action the release authority.

    We:

    • notify Chris that the excess could not be released
    • issue an excess non-concessional contributions tax assessment.

    Chris now has 21 days to pay this liability from his own sources.

    End of example

     

    Example: excess concessional and excess non-concessional contributions and defined benefit funds

    Andrew is a member of a defined benefit fund. His employer makes contributions on his behalf. These contributions are normally non-concessional contributions however, Andrew has arranged for these contributions to be salary sacrificed as concessional contributions.

    During 2017–18, Andrew's concessional contributions exceed his cap by $5,000. Andrew receives an excess concessional contributions determination but does nothing. He leaves his excess concessional contributions in super.

    Andrew is subject to the top marginal tax rate in 2017–18. Therefore, his excess concessional contributions are taxed at 47% (including the Medicare levy). Andrew receives an offset of 15% for the concessional contributions tax.

    Because Andrew's total super balance at 30 June 2017 was greater than $1.6 million his non-concessional contributions cap for 2017–18 is nil. This means Andrew's excess concessional contributions are also excess non-concessional contributions.

    Andrew can't release the excess non-concessional contributions amount because he is a member of a defined benefit fund. Therefore, Andrew must pay excess non-concessional contributions tax of 47%. This is in addition to the 47% income tax paid on the same contributions when they were excess concessional contributions. This means 94% tax has been paid on these contributions.

    In this case, Andrew's decision to enter into a salary sacrifice arrangement for his compulsory employer contributions resulted in the contributions being taxed at 94%. If Andrew had not made this arrangement, the same contributions would have been taxed as excess non-concessional contributions only at 47%.

    This example shows why it is important to carefully consider how you make extra super contributions.

    End of example

    Compensation and your non-concessional contribution cap

    The Super contribution caps fact sheet for individuals explains the impact on your contribution caps if amounts of compensation are received from financial service providers by your super fund.

    It explains the impact on your concessional and/or non-concessional super contribution caps where an amount of compensation is received by your super fund and allocated to your account.

    It also explains how you may apply to the ATO to request the Commissioner exercise discretion to disregard or reallocate your contributions where you have or will exceed your concessional or non-concessional contribution caps.

    Your super fund may receive compensation from a financial services provider due to the provision of inappropriate financial advice or where fees were paid but no advice provided. The compensation may include an amount reflecting a refund or reimbursement of adviser fees and/or an amount to compensate for lost earnings. It may also include an interest component.

    Whether the compensation is a contribution and therefore counted towards your contribution caps will depend on the circumstances in which the compensation is received, including:

    • where your super fund engaged the financial service provider and has a right to compensation
    • where you personally engaged the financial services provider and you have a right to compensation
    • where there is no right to compensation.

    The compensation will be a non-concessional contribution in the financial year it is received by the fund, if it has been paid to your super fund and allocated to your account and one of the following circumstances applies:

    • the compensation was paid to you and you subsequently contributed it as a personal contribution to your super fund, or
    • you directed the financial service provider to pay the compensation that was payable to you into your super fund.

    However, it will be a concessional contribution to the extent that it is covered by a valid and acknowledged notice of intent to claim a deduction and is allowable as a deduction.

    Timing of contributions

    When working out your super contributions for the financial year, remember that contributions only count when the payment is received by your fund, not when the payment is sent.

    Make sure your fund receives all your contributions by 30 June, if that is what you intend.

    It's important to keep track of:

    • the amount of contributions
    • when they are received by your super fund.

    This can help you avoid exceeding the non-concessional contributions cap and paying extra tax.

    Self-managed super fund members

    If you are a member of a self-managed superannuation fund (SMSF) you may be able to make a non-concessional contribution in one financial year and have it count towards your non-concessional contributions cap in the following financial year. You and your SMSF will need to meet several conditions.

    If you want this to happen, you will need to let us know by either:

    • lodging information through Online services for agents or Online services for business (your agent may lodge this for you)
    • writing to us at

    Australian Taxation Office
    GPO Box 9990
    YOUR CAPITAL CITY STATE POSTCODE

    Note: You cannot use the Request to adjust concessional contributions form for non-concessional contributions. However, the form does provide details of the conditions and the information you need to provide to us.

    Working out your non-concessional contributions cap

    The annual non-concessional contributions cap is currently $110,000.

    This cap can increase due to indexation. We will update this information if it does.

    Table 2: non-concessional contributions caps from 2013–14 onwards

    Financial year

    Non-concessional cap

    2021–22

    $110,000

    2020–21

    $100,000

    2019–20

    $100,000

    2018–19

    $100,000

    2017–18

    $100,000

    2016–17

    $180,000

    2015–16

    $180,000

    2014–15

    $180,000

    2013–14

    $150,000

    Your own non-concessional cap may be higher or lower

    If your total super balance is greater than or equal to the general transfer balance cap ($1.6 million from 2017–21; $1.7 million from 2021–22) at the end of the previous financial year, your non-concessional contributions cap is nil ($0) for the financial year.

    Your non-concessional contributions cap can be changed if you are eligible for the bring-forward arrangement. This arrangement allows you to bring forward the equivalent of 1 or 2 years of your annual cap from future years. This means you can make contributions up to 2 or 3 times the annual cap amount over the bring-forward period.

    How to view your non-concessional contributions cap information

    You can view and manage your non-concessional contributions and bring-forward arrangement using ATO online services (accessed via myGov).

    Log in to ATO online services, select Super, then navigate to Non-concessional contributions.

    Be aware that due to the reporting timeframes of funds, especially SMSFs, the latest information may not be available in ATO online services. You can contact your super fund to get the most up to date information.

    To access online services, see:

    Bring-forward arrangements

    If you make contributions above the annual non-concessional contributions cap you may be eligible to automatically gain access to future year caps. This is known as the bring-forward arrangement. It allows you to make extra non-concessional contributions without having to pay extra tax.

    Eligibility for the bring-forward arrangement depends on your:

    • age
    • total super balance on 30 June of the previous financial year.

    Age

    1 July 2008 – 30 June 2020

    If you are under 65 years of age at any time in a financial year, you may be able to make non-concessional contributions of up to 3 times the annual non-concessional contributions cap in that financial year.

    If you are 65 years old or older on 1 July, you cannot access the bring-forward arrangement in that financial year. You need to meet conditions for certain types of contributions to be accepted by your super fund, including satisfying the work test or work test exemption (from 1 July 2019).

    1 July 2020 - 30 June 2022

    If you are under 67 years of age at any time in a financial year, you may be able to make non-concessional contributions of up to 3 times the annual non-concessional contributions cap in that financial year.

    If you are 67 years old or older on 1 July, you cannot access the bring-forward arrangement in that financial year. You need to meet conditions for certain types of contributions to be accepted by your super fund, including satisfying the work test or work test exemption.

    If you are 67 years or older you need to meet conditions for certain types of contributions to be accepted by your super fund, including satisfying the work test or work test exemption.

    If you are 75 years or older your fund may only be able to accept employer contributions and downsizer contributions.

    1 July 2022 and later years

    If you are under 75 years of age at any time in a financial year you may be able to make non-concessional contributions of up to three times the annual non-concessional cap in that financial year.

    If you are 75 years or older your fund may only be able to accept employer contributions and downsizer contributions.

    For more information, see acceptance of member contributions and work test.

    Example: eligible for the bring-forward arrangement

    Bernard is 74 years old on 1 July 2022. His non-concessional contributions cap for 2022–23 is $110,000. His total super balance at 30 June 2022 is $800,000.

    Bernard's age makes him eligible for the bring-forward arrangement.

    During the financial year he made the following non-concessional contributions to his super fund:

    • $75,000 in October 2022
    • $75,000 in April 2023.

    Bernard has triggered the bring forward arrangement.

    End of example

    Total super balance

    From 1 July 2017, your total super balance affects:

    • the non-concessional contributions cap amount that you can bring-forward
    • whether you have a 2-year or 3-year bring-forward period.

    Your total super balance is determined at the end of 30 June of the financial year before the year in which you made the contributions that triggered the bring-forward.

    For the 2022-23 financial year and later years, to access the non-concessional bring-forward arrangement you must meet all these conditions. You:

    • are under 75 years old for at least one day during the triggering year (the first year)
    • contribute more than the annual cap ($110,000 from 2021-22)
    • are not already in an active bring-forward period
    • have a total super balance at the end of 30 June of the previous financial year that    
      • is less than the general transfer balance cap ($1.7 million from 2021-22) For example, for 2020-21 your total super balance at the end of 30 June 2020 must be less than $1.5 million
      • has a capacity greater than the annual non-concessional contributions cap ($110,000 from 2021-22)
       

    For the 2020–21 and 2021-22 financial years, to access the non-concessional bring-forward arrangement you must meet all these conditions. You:

    • are under 67 years old for at least one day during the triggering year (the first year)
    • contribute more than the annual cap ($100,000 from 2017–18; $110,000 from 2021–22)
    • are not already in an active bring-forward period
    • have a total super balance at the end of 30 June of the previous financial year that          
      • is less than the general transfer balance cap ($1.6 million from 2017–18; $1.7 million from 2021–22)
      • has a capacity greater than the annual non-concessional contributions cap ($100,000 from 2017–18; $110,000 from 2021–22). For example, for 2020–21 your total super balance at the end of 30 June 2020 must be less than $1.5 million.
       

    For the 2019–20 financial year and earlier years, the age condition was 65 years of age. 

    Note: A change to the age restriction for the bring forward arrangement is currently before Parliament. If passed, this law would change the age restriction to be 66 years or younger for 2020–21 and later financial years.

    Once a bring-forward arrangement is triggered in a financial year your non-concessional contributions made over the next 1 or 2 years cannot be more than the sum of your increased bring-forward non-concessional contributions cap amount minus the non-concessional contributions made in the year the bring-forward was triggered.

    For example, if you used your total increased bring-forward cap in the first year, you would have a nil cap for the next 2 years.

    For 2017–18 onwards, the remaining cap amount for the second or third year of a bring-forward arrangement is reduced to nil for a financial year if your total super 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

    From 1 July 2021

    The amount of the non-concessional contributions cap you can bring forward is either:

    • 3 times the annual non-concessional contributions cap over 3 years (that is, $330,000) if your total super balance on 30 June of the previous financial year is less than $1.48 million
    • 2 times the annual cap over 2 years (that is, $220,000) if your total super balance on 30 June of the previous financial year is above $1.48 million and less than $1.59 million
    • nil ($0) if your total super balance is $1.59 million or above.

    These limits are based on the:

    • non-concessional contribution cap of $110,000
    • total super balance in relation to the general transfer balance cap of $1.7 million.

    The following table represents the bring-forward arrangement for the first year.

    Table 3: Bring-forward period

    Total super balance on 30 June of previous year

    Non-concessional contributions cap for the first year

    Bring-forward period

    Less than $1.48 million

    $330,000

    3 years

    $1.48 million to less than $1.59 million

    $220,000

    2 years

    $1.59 million to less than $1.7 million

    $110,000

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

    $1.7 million or more

    nil

    Not applicable

    From 1 July 2017 to 30 June 2021

    The amount of the non-concessional contributions cap you can bring forward is either:

    • 3 times the annual non-concessional contributions cap over 3 years (that is, $300,000) if your total super balance on 30 June of the previous financial year is less than $1.4 million
    • 2 times the annual cap over 2 years (that is, $200,000) if your total super balance on 30 June of the previous financial year is above $1.4 million and less than $1.5 million
    • nil ($0) if your total super balance is $1.5 million or above.

    These limits are based on the:

    • non-concessional contribution cap of $100,000
    • total super balance in relation to the general transfer balance cap of $1.6 million.

    The following table represents the bring-forward arrangement for the first year.

    Table 4: Bring-forward period (2017–21)

    Total super balance on 30 June of previous year

    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

    Not applicable

    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. The bring-forward cap amount is set based on the cap in the first year of the period.

    For example, if the non-concessional contributions cap in the second and third year of a bring-forward period changed to $110,000 due to indexation, your non-concessional cap will still be $300,000 ($100,000 × 3 years) and not $320,000 ($100,000 + $110,000 + $110,000).

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

    For more information, see Indexation of the general transfer balance cap.

    Example: trigger bring-forward arrangement

    Sandra is 53 years old and has a total super balance of $1.42 million as at 30 June 2018. She contributes $150,000 non-concessional contributions to her super fund during 2018–19.

    These contributions trigger the bring-forward arrangement because they are more than the cap of $100,000.

    As Sandra's total super balance is between $1.4 million and $1.5 million, she has a 2-year bring-forward period (2018–19 and 2019–20) with a cap of $200,000.

    Sandra can contribute an extra $50,000 ($200,000 minus $150,000) non-concessional contributions in 2019–20 without exceeding her cap.

    However, if her total super balance reaches $1.6 million or more on 30 June 2019, her cap for 2019–20 will be nil and any non-concessional contributions made in that year will be excess non-concessional contributions.

    Example: a single contribution

    Alan is 60 years old and has a total super balance of $1.3 million as at 30 June 2019. He makes a single non-concessional contribution of $300,000 to his super fund in 2019–20. This triggers the bring-forward arrangement as it exceeds the annual non-concessional contributions cap of $100,000.

    As Alan's total super balance is less than $1.4 million, he has a 3-year bring-forward period (2019–20 to 2021–22) with a cap of $300,000.

    Therefore, Alan can't make any more non-concessional contributions in 2020–21 or 2021–22 without exceeding the cap as his remaining cap is nil ($300,000 minus $300,000).

    Example: effect on the following year

    Austin is 42 years old and has a total super balance of less than $1.4 million on 30 June 2018. In 2018–19, he makes non-concessional contributions of $100,000.

    Austin forgot that $2,000 in non-concessional contributions are automatically direct-debited into his fund from his bank account each year. As a result, Austin made $102,000 of non-concessional contributions for 2018–19. This triggers the bring-forward arrangement.

    As Austin's total super balance is less than $1.4 million, he has a 3-year bring-forward period (2018–19, 2019–20 and 2020–21) with a cap of $300,000.

    In 2019–20, Austin contributes a further $300,000. Austin's non-concessional cap for 2019–20 was $198,000 ($300,000 minus $102,000). This means he made excess contributions of $102,000 in 2019–20 ($300,000 minus $198,000).

    Example: re-contribution strategy

    John is 61 years old and in 2018–19 he makes a personal non-concessional contribution of $200,000 to his super fund.

    As John's total super balance is less than $1.4 million on 30 June 2019, this triggers a 3-year bring-forward period (2018–19 to 2020–21) with a non-concessional cap of $300,000.

    John now has $100,000 remaining non-concessional cap space for 2019–20 and 2020–21.

    In 2019–20, 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 2020–21, John decides to re-contribute the term deposit amount of $300,000 to his super fund. John's total super balance on 30 June 2020 is less than $1.6 million.

    Because this will be counted as a new non-concessional contribution, John will exceed his non-concessional cap by $200,000 ($300,000 minus $100,000).

    End of example

    How to view your bring-forward arrangement

    You should check your ATO online services account:

    • to see if you have triggered a bring-forward arrangement
    • if you are considering making a large contribution.

    Log in to ATO online services, select Super, then navigate to Bring-forward arrangement.

    Be aware that the latest information may not be available in ATO online services due to the reporting timeframes of funds, especially SMSFs. You can check with your super fund to get the most up to date information.

    To access online services, see:

    Transitional period

    If you 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, there are transitional arrangements that apply. This means that the maximum amount of bring-forward amount available to you reflect the reduced annual non-concessional contributions caps.

    If the bring-forward arrangement was triggered in:

    • 2015–16, the transitional cap was $460,000 ($180,000 for 2015–16, $180,000 for 2016–17 and $100,000 for 2017–18).
    • 2016–17, the transitional cap was $380,000 ($180,000 for 2016–17 and $100,000 for 2017–18 and $100,000 for 2018–19).

    For 2017–18 and 2018–19, the remaining cap amount for the second and third years of a bring-forward arrangement were reduced to nil for a financial year if your total super balance was greater than or equal to the general transfer balance cap at the end of 30 June of the previous financial year.

    Table 5: Transitional contributions cap limits for 2014–15 to 2018–19

    3-year bring-forward cap amounts

    2014–15 to 2016–17

    2015–16 to 2017–18

    2016–17 to 2018–19

    Range

    $0 to $540,000

    $0 to $460,000

    $0 to $380,000

    If, before 1 July 2017, you made non-concessional contributions of more than the transitional cap but less than $540,000, you will not have exceeded your non-concessional bring-forward cap. However, you cannot contribute any further non-concessional contributions under the bring-forward arrangement in remaining years.

    If, after 1 July 2017, you make non-concessional contributions that are more than your transitional cap, you will have exceeded your non-concessional contributions bring-forward cap.

    Example: bring-forward transitional period – cap fully used in 2016–17

    In 2016–17, John contributes $540,000 non-concessional contributions and triggers the bring-forward arrangement.

    From 1 July 2017, the general non-concessional contributions cap reduced from $180,000 to $100,000. This reduces John's 3-year bring-forward cap to $380,000 ($180,000 for 2016–17, $100,000 for 2017–18 and $100,000 for 2018–19).

    Although John's non-concessional contribution of $540,000 would exceed this new bring-forward cap, because his contribution was made before 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 make any extra non-concessional contributions under the bring-forward arrangement in 2017–18 and 2018–19.

    Example: bring-forward transitional period

    In 2016–17, Barry contributes $200,000 non-concessional contributions and triggers the bring-forward arrangement.

    From 1 July 2017, the general non-concessional contributions cap reduced from $180,000 to $100,000. This reduced Barry's 3-year total bring-forward cap to $380,000 ($180,000 for 2016–17, $100,000 for 2017–18 and $100,000 for 2018–19).

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

    The amount that Barry can contribute in 2017–18 and 2018–19 will now depend upon his total super balance at the end of 30 June 2017 and 30 June 2018.

    At the end of 30 June 2017, Barry's total super 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 growth in the fund, Barry's total super balance at the end of 30 June 2018 is 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).

    If Barry makes any non-concessional contributions in 2018–19 he will exceed his non-concessional contributions cap.

    End of example
      Last modified: 11 Jul 2022QC 19749