"What is the maximum non-concessional contribution I can make to my super?"
- Question from Seamus in Beenak, VIC
Top answer provided by:
Kieran Menzie
Hi Seamus,
Thank you for your question – in fact, it’s quite a common question I get asked, as rules change around contributions every so often.
You have asked specifically around the “maximum amount of non-concessional contributions (NCC) you can make” – to answer this, there are three main areas to consider:
- Your age
- Whether you have made any non-concessional contributions in the last three financial years (which includes the current financial year)
- The balance of your superannuation fund (and other retirement funds/accounts)
Firstly, non-concessional super contributions are payments you put into your super from your savings or from income you have 'already paid tax on'. They are also called 'after tax' contributions. These contributions are not taxed once received by your super fund. However, you may pay tax on them if you exceed your non-concessional contribution cap. Click here for more information around “before tax” and “after tax” contributions.
Generally speaking, the NCC cap is $110,000 per financial year, or you can bring forward an additional two years and place in $330,000 over a three-year period (this is called using the bring forward rule). Click here for all information around NCC’s.
Your NCC cap may change though, based on a few factors:
1. Your age
Up until 30th June 2022, if you were over age 67, you needed to meet what we call a “work test” to be able to contribute a NCC to super.
However the rules have recently changed, whereby, if you are now under 75 years of age at any time in a financial year you may be able to make non-concessional contributions of up to three times the annual non-concessional cap in that financial year (using the bring forward rule of up to $330,000).
2. Whether you have made any non-concessional contributions in the last three financial years (which includes the current financial year)
If you have made any contributions in the last 3 financial years (including the current financial year), then the $330,000 is reduced to the remaining amount within the bring forward rule cap.
For example, let's say that a $150,000 NCC in 2021 FY was contributed (this being over $110,000, therefore triggering the bring forward rule), this would mean that in the current FY (2023), the remaining amount will be $180,000 that may be contributed as a NCC.
3. The balance of your superannuation fund (and other retirement funds/accounts)
Depending on your “total superannuation balance” (TSB), which includes many different retirement funds and accounts – click here for more information), it may restrict you on how much you can place into super as a NCC.
If your TSB is $1,700,000 or above on 30th June, you will not be able to make an NCC’s the following FY. If it is $1,480,000 or above, it would be best to seek advice around this.
NOTE: From 30 June, your TSB is used to determine whether you are eligible to make a NCC, for the following financial year.
The TSB can get quite complex, depending on your retirement accounts and balances – if you needed more information around this, please click here.
A few other considerations:
- If you exceed your NCC, you have some options, as well as potential consequences – Further information here.
- If you make any NCC’s to super, you will not be able to access these super contributions until you have met a condition of release, so if for example you are 30 years old and you contribute $110,000 into super, you will be locking these funds away until retirement (or meet another condition of release) – Further information here.
- Whether you should be claiming a tax deduction on any of the funds placed into super to reduce your taxable income.
- If you are unable to make a NCC in your name, you may be able to make it in your spouse’s name, if they meet the eligibility requirements.
- There are separate rules and guidelines if you were to downsize your home and look to place funds into super. These do not count towards your NCC cap – Further information here.
Should you have any further questions or would like a complementary initial consultation, please feel free to reach out.
I hope this helps!
Regards,
Kieran
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