From 1 July 2021, Australians will be able to put more into their super as the concessional and non-concessional contribution caps and the general transfer balance cap are set to increase due to indexation for the first time since July 2017.
Concessional contributions are contributions that are made into your super fund before tax. They are taxed at a rate of 15% in your super fund. The annual concessional contribution cap will increase from $25,000 to $27,500.
Non-concessional contributions are contributions that are made into your super fund after tax is paid. The annual non‑concessional contribution cap will also increase on 1 July 2021 from $100,000 to $110,000, or a lump sum of $330,000 every three years.
Also there has been an indexed increase in the transfer balance cap from $1,600,000 to $1,700,000. The transfer balance cap is a limit on how much superannuation can be transferred into a tax‑free retirement account.
The Government has announced an extension of the temporary 50% reduction in superannuation minimum drawdown rates for a further year to 30th June 2022.
Should you have any queries or require further information, please contact our office.