Concessional contributions cap changes
Concessional contributions are those paid before tax is applied, and can include personal contributions that you want to claim an income tax deduction for. Any concessional contributions you make are taxed at a concessional rate of 15%.
Any super contributions you claim as a deduction count towards your concessional contributions cap. If your contributions exceed the cap, the amount will be taxed at your marginal tax rate.
In 2016–17, the concessional contributions cap was $35,000 for people aged 49 years and older at the end of the previous financial year, and $30,000 for everyone else.
From July 1, 2017, the concessional contributions cap will be $25,000 for everyone. The new cap will be indexed in line with average weekly ordinary time earnings (AWOTE), rounded down to the nearest $2,500. So, if you want to make concessional contributions above the new $25,000 cap, it’s a good idea to do it now.
From July 1, 2018, you will be able to ‘carry forward’ any unused amount of your concessional contributions cap, and you can access your unused concessional contributions cap on a rolling basis for five years. After five years, any amounts carried forward that have not been used will expire. The first year you can access unused concessional contributions is 2019–20.
You can only carry forward your unused concessional contributions cap if your total superannuation balance is less than $500,000 at the end of June 30 of the previous financial year.