Historically, superannuation contributions operated on a strict annual basis—miss a year, and you lost that opportunity forever. However, recent legislative changes have introduced greater flexibility, allowing for more strategic planning to boost your superannuation balance.

Rolling Over Unused Contribution Limits

Since July 2018, you can roll over unused concessional contribution limits into future years. If you didn’t use the full concessional (deductible) contribution limit—$25,000 at the time—you can carry forward the unused portion for up to five years.

Example: In the 2019 financial year, if your total concessional contributions were $11,500, you could make additional contributions of $13,500 in a future year, over and above that year’s limit.

Eligibility: Your total superannuation balance across all accounts must be less than $500,000 as of June 30 of the previous financial year.

Significance of 2024: Unused contribution limits from 2019 will expire after June 30, 2024. Therefore, if you haven’t utilized any of the concessional contributions in the past five years, you could contribute and claim a deduction for up to $157,500 this year.

Contributions for Older Australians

From July 1, 2022, the rules changed to allow non-working Australians up to age 75 to make non-concessional contributions, regardless of their work status. Previously, the age limit was 67.

Limitations: To make non-concessional contributions, your total superannuation balance must be less than $1.9 million as of June 30 of the previous financial year.

Personal Concessional Contributions Made Easier

Since July 1, 2017, it’s been simpler for individuals with employer income to make personal concessional contributions. Previously, only those who were self-employed or substantially self-employed (less than 10% of their income from an employer) could do so. The removal of the “10 percent test” has broadened eligibility, enabling more people to maximize their tax-effective contributions.

No Maximum Balance Limit: Unlike catch-up contributions (which have a $500,000 limit) and non-concessional contributions (which have a $1.9 million limit), there is no maximum balance limit for making these personal concessional contributions.

Strategic Considerations

These changes provide substantial opportunities to enhance your superannuation. If your superannuation balance was just under $500,000 as of June 30, 2023, you can still make significant catch-up contributions. Additionally, anyone able to make large concessional contributions should consider doing so to benefit from tax savings and bolster their retirement funds.

However, keep in mind:

• Concessional contribution caps and potential tax implications.
• The proposed soft limit on super balances exceeding $3 million, which will impose additional taxes from the 2025-26 financial year.
• Restrictions on accessing superannuation funds.

These changes aim to make superannuation contributions more flexible and accessible, allowing you to better prepare for a comfortable retirement.