Carry-forward Unused Superannuation Contributions

14th April 2021

From 2019-2020, carry-forward rules allow you to make larger concessional contributions if you haven’t used all of your concessional cap in an earlier year, without having to pay extra tax.

If you make or receive concessional superannuation contributions of less than the annual concessional contributions cap of $25,000 pa, you may be able to accrue these unused amounts for use in subsequent financial years.

Concessional contributions include contributions from employment, salary sacrifice and after-tax personal contributions.

2018/19 was the first financial year you could accrue unused cap amounts and these amounts can be used from 1 July 2019. Unused cap amounts can be carried forward for up to five years before they expire.

To use your unused cap amounts you need to meet two conditions:
• Your total super balance at the end of 30 June of the previous financial year is less than $500,000;
• You made concessional contributions in the financial year that exceeded your general concessional contributions cap ($25,000).

The oldest available unused cap amounts are used first. For example, unused cap amounts from 2018-19 would be applied to increase your cap first before unused cap amounts from 2019-20.

Important things to consider:
• To use up carried forwards cap amounts, you may want to make salary sacrifice or personal deductible contributions (will help reduce tax payable);
• You can’t access your super until you meet a condition of release such as reaching preservation age and retiring, ceasing employment on or after age 60 or turning 65.

Should you have any queries or require further information, please contact our office – (08) 8431 1644.