Contributing large sums to super
03 May 2024
As you get closer to retirement you may want to contribute a larger sum of money to super, such as a bonus payment from work or an inheritance. Although there are limits on how much you can contribute to super each financial year, it’s possible to contribute more without paying additional tax, if you meet eligibility conditions, by using the carry forward rule or bring forward arrangement.
Carry forward rule
The Carry forward rule allows you to contribute to your super account unused concessional (before-tax) contribution amounts from previous financial years. You would have an unused concessional contribution amount if you contributed less than the concessional contribution cap in a financial year.
Concessional contributions cap amount is:
- From 1 July 2021: $27,500 per financial year
- From 1 July 2024: $30,000 per financial year
(Read our Super contribution caps blog for more information on the caps, including what happens if you go over them, and to learn more about the different types of contributions.)
There are a few things to note if you’re considering using the carry forward rule to make extra concessional contributions without paying additional tax:
- To contribute your unused cap amounts you must have a total super balance of less than $500,000 on 30 June of the previous financial year (in your BUSSQ accounts and any other super accounts in your name).
- You can carry forward and contribute unused cap amounts from the 2018-19 financial year onwards. Unused cap amounts from 2017-18 financial year or prior financial years are not able to be carried forward.
- Unused cap amounts are available for a maximum of five years and after this period will expire. For example, unused cap amounts from the 2018/19 financial year will expire at the end of the 2023/24 financial year.
For example:
If in the 2022/23 financial year, you made a total of $20,000 in concessional contributions, as the cap at that time was $27,500, you can carry forward the remaining $7,500 cap amount from that year.
This means, in the 2023/24 financial year, you could make up to $35,000 in concessional contributions.
This $35,000 includes:
For more information on the carry forward rule and other examples of how you could use it to contribute more to your super visit the ATO.
To work out if you have any unused concessional contributions, log into MemberOnline to view the concessional contributions you’ve made to BUSSQ since 2018-19.
If you have multiple super funds you will also need to check with your other super fund/s because contributions made to all your super funds count towards your contribution caps. You should also remember that contributions count towards the cap in the year your super fund receives them. You can also log into ATO online services to view your concessional contributions and the carry forward contributions you have available across all funds (be aware, the information held by the ATO may not be up to date).
Bring forward arrangement
The bring forward arrangement allows you to access your future non-concessional contribution cap amounts. This means you may be able to make up to three years' worth of non-concessional (after-tax) contributions in a single year, without exceeding the cap or paying extra tax.
Non-concessional contribution cap amounts:
• From 1 July 2021: $110,000 per financial year
• From 1 July 2024: $120,000 per financial year
(Read our Super contribution caps blog for more information on the caps including what happens if you go over them, and to learn more about the different types of contributions.)
Eligibility
To be eligible to use the bring forward rule, you must be under the age of 75 and your total superannuation balance must be under the below amounts at the end of the last financial year.
Bring-forward cap first year (applying to 2023–24)
| Total super balance on 30 June of the previous financial year | Bring-forward contributions available |
|---|---|
| Less than $1.68 million | Access to full $330,000 cap over 3 years |
| $1.68 million to less than $1.79 million | Access to $220,000 over 2 years |
| $1.79 million to less than $1.9 million | Access to $110,000 cap (no bring forward, non-concessional contributions cap applies) |
| $1.9 million or more | You can't make non-concessional contributions to super or use the bring-forward rule. |
Bring-forward cap first year (applying to 2024–25 and later years)
| Total super balance | Bring-forward contributions available |
|---|---|
| Less than $1.66 million | Access to full $360,000 cap over 3 years |
| $1.66 million to less than $1.78 million | Access to $240,000 over 2 years |
| $1.78 million to less than $1.9 million | Access to $120,000 cap (no bring forward, non-concessional contributions cap applies) |
| $1.9 million or more | You can't make non-concessional contributions to super or use the bring-forward rule. |
For example, in July of 2024, Dave who is 61 years old and has a total superannuation balance of $400,000, inherits $260,000 and decides to put that money into his super, rather than the bank. Dave takes advantage of the bring forward arrangement and tops up his super account with the $260,000 in a single year. Because Dave hasn’t gone over the $360,000, he can still make further non-concessional contributions of up to $100,000, into his super over the next two financial years.
Be aware that specific age limits and requirements apply. For more information on the bring forward arrangement, other examples of how you could use it to contribute more to your super and how this applies for the 2021/22 and 2023/24 financial years visit the ATO.
It is also important to know that while non-concessional contributions are not taxed as they enter the super fund, once in your account, their associated investment earnings are taxed at a maximum of 15%.
We’re here to help you
If you would like to find out more about contributions, or using the carry forward rule or bring forward arrangement to make additional contributions to your BUSSQ account, our team are available to help you. As a BUSSQ member you also have access to personal financial advice on contributions at no extra cost*. Call us on 1800 692 877.
Sources: https://www.ato.gov.au/individuals-and-families/super-for-individuals-and-families/super/growing-and-keeping-track-of-your-super/caps-limits-and-tax-on-super-contributions
* The advice is limited to BUSSQ products and is advice on insurance, investment choice, contributions and retirement. The cost of this advice is included in the administration fees and costs. BUSSQ members also have access to tailored retirement advice which is advice on transition to retirement and retirement income streams. If the advice given extends beyond a member’s BUSSQ super account, an additional fee is payable which will be detailed in the Statement of Advice your advisor gives you. Personal advice is provided by one of our financial planners who are Authorised Representatives of Industry Fund Services Limited (IFS) (ABN 54 007 016 195 AFSL 232514). IFS is responsible for any advice given to you by its representatives.
This article provides general information only and does not take into account your personal financial situation or needs. Before acting, you should review the Product Disclosure Statement (PDS) to ensure you have all the information about the relevant BUSSQ product and how it works and consider the appropriateness of the information to your needs or obtain financial advice tailored for your personal circumstances. The PDSs and Target Market Determinations for BUSSQ products can be found at bussq.com.au/forms-and-resources.
Prepared on 3 May 2024. There may be changes after publication date, for the most up to date information go to ato.gov.au. Issued by BUSS (Queensland) Pty Ltd ABN 15 065 081 281 AFSL 237860, Trustee for Building Unions Superannuation Scheme (Queensland) (BUSSQ) ABN 85 571 332 201.