Super contributions: Juggling two caps is not excessive

Q: For a taxpayer aged over 50, can a total contribution of $175,000 this year (150K non concessional and 25k concessional) and a total contribution of $475,000 next financial year (450k non concessional and 25K concessional) be made without attracting penalty tax?

A: The short answer is ‘yes’ but I will need to add a bundle of qualifications to my response.

1. I assume you’re referring to the 2012/2013 and 2013/2014 financial years. An individual aged 50 or over can make up to $25,000 in concessional contributions (including compulsory employer super contributions — Superannuation Guarantee) for those years, for concessional tax treatment. Note that concessional contributions are before-tax super contributions. Any concessional contributions in excess of the $25,000 cap are subject to excess contributions tax.
2. If an individual is under the age of 65, then he or she can use the bring-forward rules to load up non-concessional contributions (after-tax contributions). For example, an individual can make $150,000 in non-concessional contributions for the 2012/2013 year, and then $450,000 in non-concessional contributions in the 2013/2014 triggering the bring-forward rules for the following two years (2014/2015 and 2015/2016 years).
3. If an individual is aged 65 or over, the maximum non-concessional contributions allowed are $150,000 each year (for the 2012/2013 and 2013/2014 years). An individual of this age must also satisfy a work test before contributing.

You can read more information about the contributions caps in the following SuperGuide articles:

• Super concessional contributions: 2012/2013 survival guide
• Your 2012/2013 guide to non-concessional (after-tax) contributions
• Superannuation contributions: Are the super caps merely a super con?
• Superannuation contributions: Wearing two caps