Superannuation bring-forward provisions expanded
10 August 2021
Eligible QSuper members who are under 67 years of age at any time in a financial year may be able to access bring-forward arrangements for non-concessional contributions with a rise in the maximum cut-off age.
Under changes announced by the Australian Government,1 the cut-off age for accessing the bring-forward non-concessional (after-tax) contributions cap has increased from 65 to 67 years of age.
This means individuals aged 65 and 66, who were not previously able to access the bring-forward non-concessional contributions cap due to their age, may be able to do so.
The change is backdated to apply to non-concessional contributions made on or after 1 July 2020, which means it applies from the 2020-21 financial year onwards.
In other changes, the annual non-concessional contributions cap has increased from $100,000 to $110,000 effective from 1 July 2021.
In addition, from 1 July 2021, members making contributions that exceed their excess concessional (before-tax) contributions cap are no longer liable to pay the excess concessional contributions charge.1
What is the bring-forward arrangement?
The bring-forward arrangement means gaining access to the non-concessional contributions cap for future years. The amount that can be brought forward depends on age and total superannuation balance and may be up to two years’ worth of contributions.
Non-concessional contributions caps that are brought forward from future years can be used all at once, or for several larger contributions. Bringing forward allows you to make larger contributions in one year without having to pay extra tax.
What is the after-tax contributions cap?
There are limits on the amount of money you can contribute to your super fund each financial year. These are called contribution caps.
Contributing too much to your super, or going over the cap, could mean extra tax, so it pays to understand how the contribution caps work.
Non-concessional contributions include any contributions you make to your super from your after tax income that you haven’t claimed as a tax deduction.
From 1 July 2021, the general non-concessional contributions cap has increased to $110,000. That’s an increase from the annual non-concessional contributions cap of $100,000 that was in place between 1 July 2017 and 30 June 2021. Your own non-concessional cap can be higher if you have activated the bring-forward arrangements, or lower depending on your total superannuation balance.
Who may be eligible to use the bring-forward arrangement?
If you want to use the bring-forward rule, you need to check you meet all of the eligibility criteria before you make your contribution.
The criteria includes:
The cut-off age for accessing the bring-forward non-concessional contributions cap is increasing from 65 to 67 years. This means that you must be under 67 years of age at any time in the financial year.
The change means individuals aged 65 and 66 who were not previously able to access the bring-forward non-concessional contributions cap due to their age, may be able to do so.
2. Whether you have triggered the bring-forward arrangement in the previous two years
If you have previously brought forward non-concessional contributions in the prior two financial years, this may limit how much you can contribute in the current financial year without exceeding the cap.
3. Your total super balance on 30 June the previous financial year
Your total super balance is determined as at 30 June and affects the non-concessional contributions cap amount that you can bring forward, and whether you have a two- or three-year bring-forward period.
Indexation has been applied to increase total superannuation balance limits from 1 July 2021. Under the changes, from 1 July 2021, account balance conditions apply if you have more than $1.48 million in super as follows:
- If you did not trigger a bring-forward arrangement in either 2019-20 or 2020-21 and your total super balance is less than $1.48 million at 30 June 2021, then you may be able to make non-concessional contributions up to $330,000 over three years.
- If you had $1.48 million to less than $1.59 million, then you may be able to contribute up to $220,000 over two years under the bring-forward arrangements.
- If you had $1.59 million to less than $1.7 million, you have access to the general non-concessional cap of $110,000 per financial year and do not have access to the bring-forward arrangements.
- If your total superannuation balance is $1.7 million or more at 30 June 2021, your non-concessional contributions cap is nil, regardless of whether you have previously triggered a bring-forward arrangement.
Removal of the excess concessional contributions charge
Members who make concessional contributions on or after 1 July 2021 that exceed their concessional contributions cap will no longer be liable to pay the excess concessional contributions charge.
The excess concessional contributions charge is an interest penalty that applies to the increased tax liability due to adding excess concessional contributions to assessable income.
Instead, you will still be issued with a determination and taxed at your marginal tax rate on any excess concessional contribution amount (with a 15% tax offset for contributions tax already paid).
Support for your super and retirement
Professional financial advice on your QSuper account at no additional cost.2
1. Australian Taxation Office, 6 July 2021, More flexible superannuation, at ato.gov.au
2. You can find out more about financial advice options at qsuper.qld.gov.au/advice or by calling us on 1300 360 750. QInvest Limited (ABN 35 063 511 580, AFSL 238274) is a separate legal entity responsible for the financial services it provides. Eligibility conditions apply. Refer to the Financial Services Guide (pdf) for more information.