Options To Build Your Superannuation And Lower Your Taxable Income

build your superannuation and lower your taxable income

Changes to legislation may allow super fund members to contribute more than the standard concessional contribution cap of $30,000 per annum. This is known as the carry-forward concessional contribution rule (also known as the catch-up concessional rule). It may allow super fund members to utilise any unused amounts of their concessional contribution cap from previous years. 

What is the carry forward contribution rule?

To take advantage of the carry forward concessional contribution, a super fund member must have a superannuation balance less than $500,000 at the 30 June and must make a concessional contribution that exceeds the concessional contribution cap in that year (currently $30,000). 

If you met this requirement, you can ‘carry forward’ any concessional contribution, which has accrued since 2019/2020 for up to five financial years, subject to your total superannuation balance, and make a concessional contributions in excess of your standard annual concessional contribution cap.  

A super fund member’s unused concessional contributions (i.e., carry-forward contributions) can only be carried forward for the next five years. If a super fund member has not used their unused cap within the five-year period, they expire.

How can I take advantage of the carry-forward concessional rule?

It is recommended that super fund members seek advice before making any contribution to their super fund. This is to ensure that they are eligible to take advantage of the carry-forward concessional contribution rule and to ensure that they do not breach any of the other contribution rules.    

For the carry-forward concessional contribution rule, when a super fund member exceeds their annual concessional cap in a particular financial year, the ATO will automatically adjust their concessional contribution cap for that year by applying any unused cap amounts. Any unused amounts from prior years are used in the order of oldest to most recent.

Who can take advantage of the carry-forward concessional contribution rules?

For super fund members who have a super fund balance less than $500,000 this strategy may benefit individuals who have:

  • large taxable incomes
  • surplus income
  • recently sold an asset and have capital gains
  • met preservation age and can utilise a transition to retirement strategy 

Need help?

Before making contributions to your superannuation fund, it is highly recommended that you seek Taxation and Financial advice. 

If you would like to explore if this strategy is suitable for you or to enhance your current superannuation balance, we can help! 

Getting started is very easy, simply contact our office or book a consultation with one of our financial advisers

General advice warning

The information on this website and in the articles provided are general information only and do not take into account your personal objectives, financial situation, or needs. It should not be relied on as legal or taxation advice, and it does not take the place of this type of advice.

You should also read the relevant Product Disclosure Statement and Financial Services Guide before making any financial decisions.
You should consider the appropriateness of the information in light of your own objectives, financial situation, or needs before acting on it by reading a copy of the Product Disclosure Statement (PDS) and, where necessary, seek professional financial advice tailored to your personal circumstances.

Solace Financial is the trading name of the entities that are Authorised Representatives of SFDS Pty Ltd (AFSL 509493). This website contains general advice which does not consider your particular circumstances. You should seek advice from Solace Financial who can consider if the strategies and products are right for you.