Contribute More to Your Super Next Financial Year

Superannuation is one of the most effective methods of saving for retirement but there are limits on how much can be contributed. These limits will be increased on 1 July 2024 which means it’s a good time to speak to your financial adviser to ensure you’re making the most of your ability to contribute to superannuation.

Types of contributions to superannuation

Essentially, there are two broad categories of contribution and each has its own cap:

• Concessional contributions receive preferential tax treatment – generally they’re made from before-tax income or are contributions you’re entitled to claim as a tax deduction.
• Non-concessional contributions are generally made from income that has already been taxed.
• Non-concessional contributions can be ‘brought-forward’ from future years to enable a larger contribution in the current financial year.

Changes to contribution limits for the 2024-25 financial year

From 1 July 2024, the following changes will come into effect:

• The concessional contributions (CC) cap will increase from $27,500 to $30,000.
• The non-concessional contributions (NCC) cap is 4 times the concessional cap, and as a result will increase from $110,000 to $120,000.
• The maximum non-concessional contribution cap using the bring-forward rules will increase from $330,000 to $360,000.

The Total Superannuation Balance (TSB) thresholds, will also be adjusted to determine the maximum amount available using the bring-forward rules:

It’s important to note a number of additional details:

• If the 3-year bring-forward period had been triggered in a previous financial year, the 2024-25 limit will be based on the previous limit that was locked in when the bring-forward period was triggered.
• A number of other thresholds are indexed by average weekly ordinary time earnings (AWOTE) and will also be changed for the 2024-25 financial year, including the government co-contribution, contribution caps for those utilising the small business concessions and the maximum amount of employee remuneration that an employer is required to pay superannuation guarantee contributions.
• The general transfer balance cap – the amount of superannuation that can be put in retirement income streams is indexed by the consumer price index (CPI) and will remain at $1.9m for the 2024-25 financial year.
• Apart from TSB considerations above, non-concessional contributions are also subjected to an upper age limit of 75.
• Between the ages of 67 and 74, for personal concessional contributions the work test rules apply.

Get the right advice

Contribution caps can be complicated and setting your super contributions at optimum level requires an understanding of both the caps and your personal circumstances. Speak to your financial adviser, who can guide you and help ensure you’re on track to meet your retirement savings goals.