Should you find yourself wanting to contribute more to your Superannuation Fund, you could consider your eligibility to make catch-up concessional contributions.
$27,500 is the maximum cap that you can contribute to your super per year and claim as a tax deduction against your income. However, if you have not used up this cap in the last 5 years, you can top up your super in the current year to both maximise your super and claim the tax deduction.
You may want to utilise this strategy if you have surplus cashflow, or if you have made a significant capital gain in the current year and want to reduce your tax.
The 2024 financial year is the last year in which the unused cap, carried forward from the very first year of the scheme (2018-19), can be used. It will drop off next year, as these amounts can only be carried forward for five years.
Before engaging with catch-up concessional contributions, it is important to check that your superannuation balance, across all your funds, is less than $500,000 as of June 30 of the previous year. If you are making a personal deductible contribution then you will also need to ensure that you complete the “Notice of Intent to Claim a Tax Deduction” with your super fund.
Case Study:
To help break it down, let’s assume that Taylor has a $450K super balance, and is on an income of $150K. She has sacrificed into super and has maximised the $27,500. She still has $12,000 of unused catch-up contributions from the 2018/19 financial year. If her cash flow permits, she can contribute the extra $12K into super, so that she doesn’t lose that cap. It is important to note that you need to use the current year cap first ($27,500) before you use the catch-up amount.
As Taylor is getting close to the $500K balance, she may also want to consider splitting contributions with her partner, Travis, if his super is also under the $500K balance.
MyGov offers more information about the amounts of unused cap contributions. Alternatively, we can access this data on our tax agent portal, on your behalf.
