Superannuation Contribution Caps to Increase

There are caps or limits on how much can be contributed to a superannuation fund each year.

Contributions to superannuation funds are categorised (generally) as concessional contributions or non-concessional contributions. Concessional contributions are tax deductible and non-concessional contributions are not. The non-concessional contributions cap is four times the concessional contributions cap.

The cap on the amount of concessional or non-concessional contributions is indexed,depending on the Average Weekly Ordinary Time Earnings (AWOTE). The required increase in AWOTE has occurred such that the contribution caps will be increased from 1 July 2024.

The standard concessional contributions cap will increase from $27,500 to $30,000. The standard non-concessional contributions cap will increase from $110,000 to $120,000. This also means that the maximum non-concessional contributions “bring forward” cap will increase from $330,000 to $360,000. The amount that can be contributed under the “bring forward" rule is affected by an individual’s “Total Superannuation Balance”. The “bring forward” rule enables up to three years of future non-concessional contributions to be brought forward or contributed earlier.

For some people, their personal concessional contribution cap may be higher than mentioned above if they are eligible to benefit from unused carried forward concessional contribution cap amounts from previous years. Individuals with a total superannuation balance of less than $500,000 on 30 June of the previous financial year can make additional catch-up concessional contributions for unused cap amounts from the previous 5 years.

The General Transfer Balance Cap, which is also indexed when the Consumer Price Index moves sufficiently, will not be adjusted for the year ending 30 June 2025. This will remain at $1.9 million. The General Transfer Balance Cap is used to place a cap on the amount of money an individual can have in the retirement phase of a superannuation fund and obtain a nil rate of income tax on investments in the fund.