Catch Up Concessional Super Contributions


Did you know you can utilise or ‘catch up’ on unused concessional super contributions?

This is possible under the “carry forward” rule allowing an individual to make additional concessional contributions in a financial year by utilising unused concessional contributions cap amounts from up to five previous financial years (commencing from the 2018/2019 financial year) providing their total superannuation balance just before the start of that financial year was less than $500,000.

The amount of the unused concessional contributions cap is the difference between the individual’s concessional contributions and the concessional contributions cap (i.e.: $25,000 per annum for the 2018/2019, 2019/2020, 2020/2021 financial years and $27,500 per annum from 1 July 2021).

When working out an individual’s unused concessional contributions cap for a financial year, the following contributions will need to be taken into account:

  • Employer compulsory superannuation guarantee (SG) contributions;
  • Salary sacrificed contributions;
  • Personal deductible contributions

Annual concessional contributions caps can limit the ability of people with interrupted work patterns or irregular income to accumulate superannuation balances in line with those with more regular or steady income. Allowing people to carry forward unused concessional contributions cap amounts for a period of up to five financial years will provide them with the opportunity to ‘catch-up’ if they have the capacity to do so.

In addition, the ability to contribute a lump sum in one year would assist with the reduction of the capital gains tax associated with the sale of an income producing asset in a specific financial year.

Also noting that the Australian Taxation Office (ATO) does NOT count excess concessional contributions for assessment of Division 293 purposes (i.e.: effectively the assessment of an individual’s taxable income and subsequent doubling of the concessional contributions tax paid on super contributions for those over the relevant threshold).

Please enquire with us today as to how we can assist.