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Catch up Contributions – A New Opportunity to Boost Your Super!
The maximum amount of concessional super contributions an individual can make each year is $25,000 per annum.
Concessional contributions include employer compulsory contributions, salary sacrifice contributions and personal contributions for which the member claims a tax deduction in their personal tax return.
Individuals with a SUPER BALANCE of LESS THAN $500,000 just before the start of the financial year can now carry forward their unused cap amount for future use, for up to five years.
The first effective year of unused contributions eligible to be carried forward is the 2018-19 financial year.
Example below:
| 2018/19 | 2019/20 | 2020/21 | 2021/22 | 2022/23 | |
Concessional contributions actually made |
$10,000 |
$10,000 |
$10,000 |
$70,000 |
$10,000 |
Available unused amount of $25k cap |
$15,000 |
$15,000 |
$15,000 |
- |
$15,000 |
Cumulative available unused cap |
$15,000 |
$30,000 |
$45,000 |
- |
$15,000 |
The catch up contributions measure could be particularly beneficial in the following scenarios:
- If you have a variable taxable income from one year to the next.
- If you have taken time out of the workforce (e.g. to raise a family) and you are now looking to boost your super in a tax effective way.
- If you haven’t been able to make additional super contributions due to the cost of having children living at home, but now they have left the nest and your cashflow situation has changed for the better.
- If you are heading into retirement in the foreseeable future and are looking to turbocharge your super balance over a short period.
- If you have sold an asset which has resulted in a large taxable capital gain in one financial year, the ability to make a larger concessional contribution to super to reduce the tax payable on the gain may be appealing.
If you would like further information, or would like to discuss, please don’t hesitate to contact Megan Stubbersfield or Carl Norman on 07 3808 9990 or ask us online.
The information contained in this email is intended for general information only, contains general advice and does not take into account your individual investment objectives, financial circumstances or needs. Information provided on and available from this site does not constitute financial, taxation or other professional advice and should not be relied upon as such. It has been prepared based on the current taxation and superannuation laws. Before you make any financial decision, we recommend that you seek professional advice from a suitably qualified professional.