Super Contribution Caps to increase from 1 JULY 2021
The Australian Taxation Office (ATO) has confirmed increases to concessional super contributions, as well as changes to non-concessional super contributions and the transfer balance cap from 1 July 2021.
Increase in concessional (pre-tax) contributions cap
Concessional contributions are those made into your superannuation fund before tax and therefore are taxed at a rate of 15% within your Fund.
The concessional contribution cap, originally set at $25,000 from 1 July 2017, is indexed by average weekly ordinary time earnings (AWOTE) in increments of $2,500.
From 1 July 2021, the concessional contribution cap will increase from $25,000 p.a. to $27,500 p.a.
Increase in non-concessional contributions cap
Personal Contributions made into a Superannuation Fund from after tax income are known as Non-Concessional contributions. These contributions are made from your own personal Bank Account and not by your Employer.
The eligibility for making a non-concessional contribution is determined by the total superannuation balance (TSB) held in your Fund.
From 1 July 2021, the non-concessional cap will increase four times the concessional contribution to $110,000 (4 x $2,500). This means that the caps will increase from $100,000 to $110,000.
Refer to table below for summary:
| Contribution | Cap to 30 June 2021 | Cap from 01 July 2021 |
| Concessional | $25,000 | $27,500 |
| Non-concessional (NCC) | $100,000 | $110,000 |
| Bring-forward maximum | $300,000 | $330,000 |
Total Super Balance (TSB) Cap Increase
The Total Super Balance Cap, which limits the amount of non-concessional contributions that can be made to super, is also indexed along with all other super caps.
From 1 July 2021, it will move from $1.6 million to $1.7 million and allows anyone with a total super balance of less than $1.7 million to make up to $110,000 each financial year as a non-concessional contribution if they qualify due to age, or are required to meet the work test if they are 67 years or older.
Changes to the bring-forward rule
The bring-forward rule allows members to contribute to their fund in one year, using three years’ worth of contributions and is determined by a members Total Super Balance (TSB).
As your TSB decreases, the amount you can contribute steadily increases. Where the balance is less than $1.48 million, then you may be able to contribute up to $330,000. You will be unable to contribute if your TSB is $1.7 million or more.
Previously, the bring-forward rule allowed members to contribute a maximum of $300,000 in one year. With the increase to the non-concessional contribution cap, this will now be updated to $330,000, provided that the member meets the relevant requirements.
Note: Before a non-concessional contribution can be made, there are strict criteria that must be met – e.g. The non-concessional contributions bring-forward rule is only applicable if the member is aged below 65 years at any point during the year of the contribution.
Refer to table below for summary:
| Total Super Balance on 30 June (prior) | Non-concessional cap using bring-forward rule | Bring-forward rule |
| Less than $1.48 million | $330,000 | 3 years to use |
| $1.48 million to less than $1.59 million | $220,000 | 2 years to use |
| $1.59 million to less than $1.7 million | $110,000 | 1 year to use |
| $1.7 million or more | NIL | N/A |
Contact Us
Arthur Kyriacou & Co. can assist you with any questions you may have in relation to your Self-Managed Superannuation Fund, Superannuation, Contributions or on any other general matters and can provide advice as required.
Please contact us on 03 9808 7377 or via email to discuss these matters further.
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