Non-concessional contributions to super are contributions an individual may choose to make from their after-tax income or accumulated saving to help boost their super savings pre-retirement. Non-concessional contributions are not taxed when contributed to an individual’s super fund. There are limits to the amount of non-concessional contributions an individual can make to super each financial year based on their age, their previous non-concessional contributions and their total super balance.
As non-concessional contributions to super are from after-tax money, the benefits from making these contributions can include:
- No tax on the contributions when made to a super fund,
- Investment returns in super are taxed at a maximum rate of 15%,
- Once eligible, upon accessing their super, any money previously contributed as a non-concessional contribution will be returned tax-free,
- Given the higher contribution limits available for non-concessional contributions, compared to other types of contributions to super, non-concessional contributions can be an effective way to boost super savings leading into retirement.
- The annual non-concessional contribution cap is $100,000. However it’s important to note a number of other factors are used to determine eligibility to make a non-concessional contribution to super.
- Individuals under the age of 65 may be able to make non-concessional contributions up to three times the annual non-concessional cap ($300,000) in a single year. This is known as the ‘bring forward’ provision.
- For the 2017/18 and 2018/19 financial years, transitional provisions may apply to limit the amount someone who has previously triggered but not fully utilised their ‘bring forward’ amount, can contribute to super.
- A non-concessional contribution of up to $100,000 per year is available to individuals between age 65 and 74 if they meet the work test in the financial year of contributions.
- From 1 July 2017, if you have a total super balance equal to or greater than $1.6 million at the end of 30th June of the previous financial year you will not be eligible to make non-concessional contributions to super.
- Individuals with less than, but close to a total super balance of $1.6 million, who may be looking to make ‘bring forward’ non-concessional contributions to super, may have their total bring forward amount limited by their total super balance.
This information is general information only. It does not constitute any recommendation or financial product advice. It provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. The information has been prepared without taking into account your personal objectives, financial situation or needs and so you should consider its appropriateness having regard to these factors before acting on it. Any tax position described in this publication is a general statement and is for guidance only