Contributions – Accumulation Phase
Indexation increases contribution caps and the transfer balance cap
Indexation ensures that the caps on superannuation that limit how much you can transfer into super and how much you hold in a tax-free retirement account, remain relevant by making pre-determined increases in line with inflation. To trigger indexation, the consumer price index (CPI) needed to reach 116.9. Australia reached 117.2 in December 2020 triggering increases to the contribution and transfer balance caps from 1 July 2021. The next increase will occur when a December quarter CPI reaches 123.75.
Concessional and non-concessional contribution caps
From 1 July 2021, the superannuation contribution caps will increase enabling you to contribute more to your superannuation fund (assuming you have not already reached your transfer balance cap).
The concessional contribution cap will increase from $25,000 to $27,500. Concessional contributions are contributions made into your super fund before tax such as superannuation guarantee or salary packaging.
The non-concessional cap will increase from $100,000 to $110,000. Non-concessional contributions are after tax contributions made into your super fund.
The bring forward rule enables those under the age of 67 to contribute three years’ worth of non-concessional contributions to your super in one year. From 1 July 2021, you will be able to contribute up to $330,000 in one year. Total superannuation balance rules will continue to apply. However, if you have utilised the bring forward rule in 2018-19 or 2019-20, then your contribution cap will not increase until the three year period has passed.
1 July 2017 – 30 June 2021
After 1 July 2021
|Total Superannuation Balance (TSB)||Contribution and bring forward available||Total Superannuation Balance (TSB)||Contribution and bring forward available|
|Less than $1.4m||$300,000||Less than $1.48m||$330,000|
|$1.4M -$1.5m||$200,000||$1.48M – $1.59m||$220,000|
|$1.5M – $1.6m||$100,000||$1.59M – $1.7m||$110,000|
|Above $1.6m||Nil||Above $1.7m||Nil|