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Putting money into your super account is easy. But to ensure you don’t take too much advantage of the generous tax benefits within the super system, the government has progressively tightened up the rules around making contributions.
One way to get some extra money into your super account is by using a ‘bring-forward’ arrangement.
What are bring-forward arrangements?
Although it sounds complicated, bring-forward contributions are just what they sound like – you bring forward your non-concessional contributions caps from future years and use them in a shorter time period.
The bring-forward rules allow you to decide to advance your contributions caps from a three-year period and use them over a shorter period – either all at once or as several large contributions.
Note: You make non-concessional contributions into your super account from your after-tax income. These contributions are not taxed in your super fund, but the associated investment earnings are taxed at 15%.
Since 1 July 2017, the annual non-concessional (after tax) contributions cap is $100,000. The bring-forward rules allow you (if you meet all the eligibility criteria), to make non-concessional contributions of up to three times the annual contributions cap in a single year (3 x $100,000 = $300,000 in 2018/2019 or 2019/2020).
Once you trigger a bring-forward arrangement in a particular year, any change to the non-concessional contributions cap during the following three-year period will not apply to you, so you are unable to take advantage of any increase (or decrease) in the contributions cap.
Note: Bring-forward arrangements are different from Carry-forward contributions. Carry-forward contributions allow you to use any of your unused concessional (before-tax) contributions cap on a rolling five-year basis.
Bring-forward arrangements on the other hand, are for non-concessional (after-tax) contributions. For more information, see SuperGuide article Carry-forward contributions: How your unused contribution limits can help you catch up.
A bring-forward arrangement: How does it work?
Case study 1
Carl is aged 52 and his total superannuation balance is currently $650,000, but he would like to boost his retirement savings in the years before his planned retirement at 61.
Carl decides to sell an investment property he owns and make a non-concessional contribution into his super account of $280,000 from the proceeds of the sale in October 2017.
As Carl has exceeded his normal annual non-concessional contributions cap of $100,000, he automatically triggers the bring-forward rules by making this large contribution. As he has triggered a bring-forward arrangement, Carl can make a further non-concessional contribution of up to $20,000 in 2018/2019 or 2019/2020 if he wishes to use up his full $300,000 three-year cap.
In 2020/2021, Carl’s non-concessional contributions cap will reset and he can make further non-concessional contributions up to the normal annual contributions cap.
Am I eligible to use a bring-forward arrangement?
If you want to use the bring-forward rules, you need to check the following points before you make your contribution:
1. $1.6 million total superannuation balance
To make any non-concessional contributions at all, your total superannuation balance must be less than $1.6 million on 30 June of the previous financial year to the one in which you want to make the contribution.
If your balance is close to $1.6 million, you will only be able to make a contribution and bring-forward the contribution caps from future years that take your total superannuation balance to $1.6 million.
|Total superannuation balance||Contribution and bring-forward available|
|Less than $1.3 million||3 years of caps ($100,000 x 3 = $300,000)|
|$1.3 – less than $1.4 million||3 years of caps ($100,000 x 3 = $300,000)|
|$1.4 – less than $1.5 million||2 years of caps ($100,000 x 2 = $200,000)|
|$1.5 – less than $1.6 million||1 year of caps ($100,000 x 1 = $100,000)|
2. Age limits
If you are aged under 65, you can make non-concessional contributions up to the annual cap ($100,000 in 2018/2019 or 2019/2020) and use the bring-forward rules. You are not required to be working.
If you are aged 65 to 74, you can make non-concessional contributions up to the annual contributions cap only if you meet the requirements of the work test (be ‘gainfully employed’ for at least 40 hours in 30 consecutive days during the same financial year in which the contribution is made). You cannot, however, use the bring-forward rules unless you were 64 for some part of the financial year in which you trigger a bring-forward arrangement (see next section). For more information, see SuperGuide article Work test: Making super contributions over 65.
Note: If you trigger a bring-forward arrangement in a financial year and subsequently reach age 65 during the three-year bring-forward period, you will need to meet the requirements of the work test if you want to make additional contributions.
For example, if you contribute $200,000 in Year 1 at age 64 and then turn 65 in Year 2 and would like to contribute another $100,000, you will need to meet the requirements of the work test.
If you are aged 75 and over, you are generally not permitted to make a non-concessional contribution and so you cannot use the bring-forward rules.
Super tip: Work test exemption
3. Age in first year
To access a bring-forward arrangement under the current rules, you need to be aged under 65 for one day during the triggering year (the first year you make the contribution).
Case study 2
Cyrrell is still working as a para-legal and is keen to boost her super account. She turned 65 on 1 July 2018 and had a Total Superannuation Balance on 30 June 2018 of $750,000.
During 2018/2019, she made a non-concessional contribution of $75,000 in October 2018 and $80,000 in April 2019, totalling $155,000.
As she turned 65 during the triggering year (first year of contributions), she is not eligible to use a bring-forward arrangement and is considered to have exceeded her annual non-concessional contributions cap by $55,000 ($155,000 – $100,000 cap).
4. Triggering bring-forward arrangement
If you want to start making a bring-forward contribution in a particular financial year, you must not have already triggered a bring-forward arrangement in the previous two years.
Tightening the bring-forward rules: Transitional arrangements
The government has progressively reduced the non-concessional contributions cap in recent years. If you entered a bring-forward arrangement in 2014/2015, for example, your bring-forward cap was $540,000.
Since then, the cap amounts have been lowered, with the bring-forward cap currently being $300,000 ($100,000 x 3 years = $300,000 in 2018/2019 or 2019/2020).
The table below shows the non-concessional contributions caps available for bring-forward arrangements during past years:
Bring-forward amounts available during transitional period
|Annual contribution cap||$180,000||$180,000||$180,000||$100,000||$100,000||$100,000|
|Maximum contribution permitted over 3-year period under contributions rules applying at that time||0 to $540,000|
|0 to $460,000|
|0 to $380,000|
|0 to $300,000|
Case study 3
Pablo made $540,000 in non-concessional (after-tax) contributions into his super account during 2016/2017 as he received a large inheritance. These contributions automatically triggering the bring-forward arrangement.
From 1 July 2017, the annual non-concessional contributions cap was reduced from $180,000 to $100,000, reducing Pablo’s three-year bring-forward cap to $380,000 (see table above).
Normally, Pablo’s contribution of $540,000 would have exceeded the new bring-forward cap. However, because his contribution was made prior to 1 July 2017, his three-year bring-forward limit is the amount applying in the triggering year when he started the bring-forward arrangement ($180,000 x 3 years = $540,000 in 2016/2017).
Although Pablo did not exceeded the bring-forward cap, he could not make any additional non-concessional contributions in 2017/2018 and 2018/2019.
In 2019/2020, however, Pablo can trigger a new bring-forward arrangement if he meets all the eligibility criteria and can contribute up to $300,000 in non-concessional contributions.
Triggering a bring-forward arrangement: What’s the process?
Starting a bring-forward arrangement is very straightforward. You don’t need to notify your super fund or the ATO, or even fill in an application, as your super fund automatically reports all contributions made into your super account to the ATO.
If you are eligible to make non-concessional contributions and you make contributions greater than the annual cap ($100,000 in 2018/2019), you automatically gain access to your future year caps. This is referring to as triggering the bring-forward rules. For this to happen, your Total Superannuation Balance must be is less than $1.4 million.
Learn more about making super contributions in the following SuperGuide articles:
- 2019/2020 guide to non-concessional contributions (after-tax super contributions)
- 2019/2020 guide to concessional contributions (before-tax super contributions)
- Salary sacrifice and super: How does it work?
- What to do if you exceed your super contributions caps
- Contribution splitting: How to boost your spouse’s super