Carry-forward contributions: How your unused contribution limits can help you catch up

Carry-forward contributions are calculated on a rolling basis over five years, but any amount not used after five years expires. These carry-forward rules only relate to concessional contributions into super, not non-concessional contributions, as they have different caps.

Learn more about concessional super contributions.

Who can benefit from carry-forward contributions?

The Government introduced the carry-forward contribution rules to make it easier for people with interrupted or non-standard work patterns to save for their retirement and to benefit from the tax concessions available in the super system in the same way as someone with a more regular income.

Annual concessional contribution caps make it difficult to build retirement savings for people who take time out from work, work part-time, or have ‘lumpy’ income and periods when they make no or limited super contributions.

Women who work part-time or take time off to care for children or other family members, or people who have time out of the workforce for caring responsibilities, further studies, or due to physical or mental illness will benefit from the new rules.

Carry-forward contributions can also be made by people who find they have more disposable income later in life due to reduced household costs such as mortgage repayments or school fees.

Am I eligible? Check your Total Super Balance

To take advantage of the carry-forward contribution rules, your Total Super Balance (TSB) must be under $500,000.

Your TSB is calculated by adding together all the amounts you have in the accumulation phase of super, plus the retirement phase value of your super and any rollovers in transit between super funds at 30 June.

Under the rules for carry-forward contributions, your TSB is calculated just before the start of the financial year in which you wish to make additional concessional contributions. For example, if you wanted to make a carry-forward concessional contribution in 2019/2020, your TSB must be under $500,000 on 30 June 2019.

For more information, see SuperGuide article What is included in my Total Superannuation Balance, and when does it apply?.

Carry-forward contributions: how they work

Case study 1

Sylvia has a $200,000 balance in her super account. During 2018/2019 she took time off work to care for her son, so Sylvia didn’t make any concessional contributions into her super account.

This means in the following financial year (2019/2020), she can contribute $50,000 in concessional (before-tax) contributions into her super account.

The $50,000 consists of her normal $25,000 annual concessional contribution cap for 2019/2020, plus $25,000 from her unused 2018/2019 concessional contribution cap which she has carried forward.

Case study 2

Leyton is aged 46 and his current annual salary is $100,000. The balance in his super account is $400,000.

In 2018/2019, the total concessional contribution made into his super account is $10,000.

This means in 2019/2020, Leyton is able to contribute $40,000 into his super account. The $40,000 consists of his normal annual $25,000 concessional contribution cap and $15,000, which is the unused concessional contribution amount from 2018/2019 carried forward ($25,000 – $10,000 = $15,000).

The entire $40,000 in concessional contributions will be taxed at 15% in the super fund. Prior to the new rules, any amount Leyton contributed in excess of his annual concessional cap would have been taxed at his (higher) margin tax rate.

Case study 3

In 2021/2022, Kylie plans to use her unused concessional contributions cap amounts to make concessional contributions of $45,000 on top of her employer’s concessional SG contribution of $5,000.

On 30 June 2021 Kylie’s Total Superannuation Balance is $480,000. She has unused concessional contribution cap amounts from the previous three financial years, so she is eligible to make a carry-forward concessional contribution in 2020/2021 of $60,000.

	2018/2019	2019/2020	2020/2021	2021/2022
Concessional contributions	$5,000	$5,000	$5,000	$50,000
Available unused concessional cap	$20,000	$20,000	$20,000	$0
Cumulative available unused concessional cap	$20,000	$40,000	$60,000	$35,000

Kylie decides to make a concessional contribution of $50,000 in 2021/2022, which would exceed her normal concessional cap by $25,000. However, Kylie is able to use the full amount of her unused contribution cap from 2018/2019 ($20,000) plus $5,000 of her unused contribution cap from 2019/2020, giving her the extra $25,000 contribution cap.

By 30 June 2022 Kylie has a Total Superannuation Balance of $530,000. This means she cannot increase her concessional contributions cap using the carry-forward provisions during 2022/2023. However, if her Total Superannuation Balance falls below $500,000, she will again be eligible to use these rules.

Checking how much you can carry-forward

The first step in working out if you can use the carry-forward rules is to check if your Total Superannuation Balance is under $500,000. Contact your super fund (or funds if you have several super accounts) to find out the value of your TSB.

The ATO can also help, as it can provide the last reported balance for your super accounts and all the details about your super via the Australian Government’s MyGov online portal.

Once you have worked out if you are eligible, you will need to track the amount you have available by looking at your concessional contributions for previous years compared to the concessional contribution cap applying in that year. This information can usually be found on your annual contribution statement provided by your super fund.

It’s important to keep track of these amounts, as if you contribute more than you are allowed under the rules, the excess amounts will be taxed at your marginal (or top) tax rate.

Learn more about concessional super contributions.