Q: From reading SuperGuide articles, I can see that since July 2017, there is no longer a special contributions cap for people between 50 and 74 years, but a general concessional contribution cap of $25,000 a year for all age groups. I can also see that for non-concessional contributions, the cap is now $100,000. Is this $100,000 cap for NON-concessional contribution the same regardless of the age of the person? I am nearly 65 and I would like to know if the limit of $100,000 a year applies to people over 65.
Yes, for the 2018/2019 year, the non-concessional (after-tax) contributions cap of $100,000 applies to individuals aged up to 74 years, as does the $25,000 concessional (before-tax) contributions cap.
You must satisfy a work test when making super contributions on or after the age of 65. You must work 40 hours in a 30-day period in the financial year in which you plan to contribute. I explain the contribution rules in more detail in the SuperGuide articles, Superannuation contributions: Wearing two caps for 2018/2019 year (and 2017/2018 year) and Over-65s work test: How does it operate?.
Super alert! From 1 July 2019 (subject to yet-to-be-enacted legislation), the federal government will introduce a one-year exemption from the over-65s work test for Australians aged 65 to 74 with superannuation balances of less than $300,000. What this means is that, for the first year an individual doesn’t meet work test requirement, an individual can still make super contributions. The full $25,000 concessional cap (plus catch-up concessional contributions) will be available, and the $100,000 non-concessional cap will also be available. On 17 December 2018, as part of the 2018 Mid-Year Economic Outlook, the federal government announced that the bring-forward rule will also be available during the one-year exemption.
Note: Anyone aged 75 years or over cannot make voluntary super contributions, although an employer can make compulsory super contributions for an employee aged 75 years or older (for more information about ageless Superannuation Guarantee contributions see SuperGuide article Employer super (SG) contributions paid for over-70s). For more information about the ban on voluntary contributions beyond age 74, see SuperGuide article Super contributions beyond the age of 75.
Background: Since 1 July 2017, the federal government has cut the annual non-concessional cap to $100,000 a year (from $180,000 a year) with an upper lifetime limit based on a person’s Total Superannuation Balance (see SuperGuide article New normal: $100,000 non-concessional contributions cap). Also taking effect since 1 July 2017, the federal government has removed the over-50s concessional (before-tax) contributions cap of $35,000 and cut the general concessional cap to $25,000 (see SuperGuide article Cut to concessional contributions caps: the back story). The same caps apply for the 2017/2018 and 2018/2019 financial years.
For the 2016/2017 year: For the 2016/2017 year and earlier financial years, a higher non-concessional (after-tax) contributions cap of $180,000 applied to individuals aged up to 74 years, and a higher concessional cap of $35,000 applied to individuals aged 49 years or over on 30 June 2016 (and $30,000 cap for individuals aged 48 years or younger on 30 June 2017).
Bring-forward rule not available for over-65s
If an individual is under the age of 65, he or she can also take advantage of the ‘bring forward’ rules when making non-concessional (after-tax) contributions. The ‘bring forward’ rule allows you to make up to two years’ worth of non-concessional contributions in advance.
For the 2018/2019 year, an individual under the age of 65 can make up to $300,000 in non-concessional contributions representing his or her cap for that year, and for the next two years.
For the 2017/2018 year, an individual under the age of 65 could make up to $300,000 in non-concessional contributions representing his or her cap for that year, and for the next two years. For the 2016/2017 year, an individual under the age of 65 could make up to $540,000 in non-concessional contributions representing his or her cap for that year, and the next two years.
Important: Note there are transitional rules for those individuals who have triggered bring-forwards in the 2 years before July 2017 (see SuperGuide articles Bring-forward rule: A definitive super guide and Understanding the transitional bring-forward rule (for 2018/2019 and 2017/2018 years)).
Note: For individuals aged 63 or 64, there is a quirk in the law that permits such individuals to take advantage of the bring forward rules even though some of the contributions relate to years where they reached the age of 65. I explain this quirk in the SuperGuide article Non-concessional contributions: Tread carefully when aged 63 or 64 or 65 (3 Q & As).
I explain how the contributions caps work in more detail in the SuperGuide articles:
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