The short story on super contributions limits (2017/2018 year)

You can make two types of superannuation contributions – concessional (before-tax) contributions and non-concessional (after-tax) contributions – and each type of contribution has a separate limit known as a contributions cap (see text and tables below).

Concessional (before-tax) contributions

Before-tax contributions, such as compulsory Superannuation Guarantee contributions, salary sacrificed contributions and personal tax-deductible contributions, are known as concessional contributions. The 2017/2018 (and 2016/2017 and 2015/2016) limits for this type of contribution are set out in the table below.

Note one: Once you reach the age of 75, you can no longer make personal (voluntary) super contributions. The one, strict exception to this age 75 rule is: if a super fund receives a super contribution on behalf of a fund member, the super contribution must be received (and read that as registered by the fund as received, by allocating the contribution to the fund member’s account) no later than 28 days after the end of the month in which the fund member turns 75. For example, Joseph turns 75 in December. Any super contribution he makes must be allocated to his account by the 28^th day of January.

Note two: Although you cannot make super contributions beyond the age of 75, your employer must continue to make Superannuation Guarantee contributions on your behalf (assuming you satisfy the eligibility rules). For more information on SG rules for older workers, see SuperGuide article Employer super (SG) contributions paid for over-70s.

Super alert! Since1 July 2017, a single concessional contributions cap of $25,000 applies for all age groups. The federal government has now abolished the special over-50s cap, and cut the general concessional contributions cap to $25,000. See table below

For more information on concessional contributions, see the following SuperGuide articles:

• Super concessional (before-tax) contributions: 2017/2018 survival guide
• Concessional contributions caps slashed since July 2017
• Concessional contributions cap: A quick guide (10 Q&As)
• Salary sacrifice and super: A guide for employees and employers
• Superannuation and employees: 10 facts about your super entitlements
• Super opportunity: Catch-up concessional contributions from July 2018

Concessional contributions cap for 2017/2018 year (and for 2016/2017 year and 2015/2016 year)

*For the 2016/2017 year, if you were 48 years or younger on 30 June 2016, then your concessional contributions cap is $30,000 for the 2016/2017 year. For the 2016/2017 year, if you were 49 years or older on 30 June 2016, then your concessional contributions cap is $35,000.

**For the 2015/2016 year, if you were 48 years or younger on 30 June 2015, then your concessional contributions cap is $30,000. For the 2015/2016 year, if you were 49 years or older on 30 June 2015, then your concessional contributions cap is $35,000.

Non-concessional (after-tax) contributions

The other type of contribution you can make is when you make a contribution from after-tax dollars, which is officially called a non-concessional contribution. You do not receive a tax concession when making this type of super contribution (and no contributions tax is deducted from the contribution by your super fund either). Once the super contribution has been recorded by your super fund, any earnings generated by investing that super contribution are taxed at 15%.

For the 2017/2018 year: The annual non-concessional contributions (NCC) cap is $100,000, and the bring-forward cap is $300,000. The bring-forward cap allows Australians under the age of 65 to bring forward up to 2 years of non-concessional contributions and potentially make up to 3 years’ worth of NCCs in one financial year.

Important: Taking effect since 1 July 2017, if your total superannuation balance is higher than $1.6 million, then you cannot make non-concessional contributions. If your total superannuation balance is higher than $1.4 million, then your ability to make NCCs is restricted (for more information on this special restriction, see SuperGuide article New $100,000 cap: Cut to non-concessional contributions cap).

For the 2016/2017 year: The annual NCC cap of $180,000, and the 3-year $540,000 bring-forward cap remained in place until 30 June 2017 (that is, it continued to apply for the 2015/2016 and 2016/2017 years). If you triggered a bring forward in one of these previous financial years, then a transitional bring-forward cap applies for the 2017/2018 year For more detailed information on the transitional bring-forward cap, see SuperGuide article New $100,000 cap: Cut to non-concessional contributions cap.

Non-concessional contributions: How do the 2017/2018 year rules work?

The annual non-concessional cap is $100,000 for the 2017/2018 year (and was $180,000 for the 2016/2017 year, and for the 2015/2016 year).

It is possible to boost your non-concessional contributions for the 2017/2018 year by taking advantage of the ‘bring forward’ rules, which allows up to $300,000 in NCCs over a 3-year period (and allowed up to $540,000 over a 3-year period for the 2016/2017 year, and for the 2015/2016 year).

If you’re under 65, you can contribute more than $100,000 in non-concessional (after-tax) contributions without having to deal with the excess contributions implications. You can do this by bringing forward up to two years’ worth of contributions (see Examples 1 and 2 in table below), which is called a ‘bring-forward’. If you’re over the age of 65, then you are subject only to the annual non-concessional cap, and you have to satisfy a work test before you can make super contributions.

The annual non-concessional contributions cap applies to each person, which means a couple can make non-concessional contributions of up to $200,000 for the 2017/2018 year (while a combined annual cap of $360,000 applied for 2016/2017 year, and for the 2015/2016 year).

Alternatively, by using the bring-forward rules, a couple can make up to $600,000 for the 2017/2018 year in after-tax contributions in one year, every three years. For the 2016/2017 year, the combined bring-forward caps for a couple were $1,080,000.

Note: Transitional provisions are in place for an individual who has triggered a bring forward during the 2016/2017 year (or during the 2015/2016 year) and the bring forward crosses over into the 2017/2018 year (starts 1 July 2017). For more information on the transitional bring-forward rules, see SuperGuide article New $100,000 cap: Cut to non-concessional contributions cap.

For the 2017/2018 year, a couple have the potential to make $600,000 in non-concessional (after-tax) contributions, and $25,000 each in concessional contributions, which means a couple can potentially make $650,000 in super contributions in a year (for the 2017/2018 year).

When you contribute more than $100,000 for the 2017/2018 year in non-concessional contributions in one year, you automatically trigger the ‘bring forward’ rules for the following two years. For example, if you made a $190,000 after-tax contribution in Year 1, and you then made a $110,000 contribution in Year 2, which is a total of $300,000 — three years of limits — you couldn’t then start the process again in Year 3, with say, a $300,000 contribution: the maximum that you can contribute in Year 3 was nil due to the earlier triggering of the bring-forward rules. Your contributions for Year 3 are linked with what you contributed in previous years (see Example 3 in table below), assuming you triggered the bring-forward rule in a previous financial year. You can then only restart the process in year 4 (see Example 4 in table below).

Note: Due to the lower annual non-concessional cap of $100,000 from 1 July 2017, and the lower bring forward cap of $300,000, there will be transition provisions for an individual who has triggered a bring forward under the $540,000 bring forward limit during the 2016/2017 year or 2015/2016 year, and the bring forward crosses over into the 2017/2018 year (starts 1 July 2017). For more information on the transitional rules, see SuperGuide article New $100,000 cap: Cut to non-concessional contributions cap.

For more information on the general non-concessional contributions rules, see SuperGuide article Your 2017/2018 guide to non-concessional (after-tax) contributions.

It is confusing when expressed in words, so if you’re interested in the rules, then take your time working through the table below. Expressing the rule in another way: if you make a $200,000 after-tax contribution during the 2017/2018 year on, say, March 20, 2018, that brings forward one year of contributions, but it means you have triggered the bring-forward rules for the next two years (see Example 5 in table). Under the current rules, the maximum amount of non-concessional contributions that you can then make over the next two years is $100,000 in total, taking your contributions to the $300,000 maximum over the three-year period.

Note: Concessional (before-tax) contributions in excess of your age-based limit will also count towards your non-concessional limit. The Government co-contribution does not count toward your non-concessional (after-tax) contribution limit. And if your total superannuation balance is higher than $1.6 million, then you cannot make non-concessional contributions.

Important: Once you trigger the bring forward, your annual non-concessional contributions cap is based on the first year, regardless of whether the non-concessional cap is to be indexed in later years of the bring forward. Such a rule also applies from 1 July 2017, but there will be an adjustment for bring forwards crossing over into the 2017/2018 year, to allow for the cut in the annual non-concessional cap to $100,000.

For more information on non-concessional contributions rules, see the following SuperGuide articles:

• Your 2017/2018 guide to non-concessional (after-tax) contributions
• New $100,000 cap: Cut to non-concessional contributions cap
• Cashing in on the co-contribution rules (2017/2018 year)

How the bring-forward rules work: Non-concessional contribution cap examples

*You can stretch the $100,000 annual limit over three years; for example, by making a $300,000 contribution in one year, representing your entitlement for the next three years. Once you trigger the bring forward, your annual non-concessional contributions cap is based on the first year, regardless of whether the non-concessional cap was to be indexed in later years of the bring forward. The ‘bring forward’ option is only available for those under the age of 65. Note that from 1July 2017, if your super account balances is $1.6 million or higher, you cannot make non-concessional contributions.

**If a bring forward triggered during the 2016/2017 or 2015/2016 years, crosses over into the 2017/2018 year, transitional provisions will apply to adjust downwards the balance of the bring forward amount, yet to be used. The ‘bring forward’ option is only available for those under the age of 65.

For more information on the non-concessional (after-tax) contributions caps, see the following SuperGuide articles:

• Your 2017/2018 guide to non-concessional (after-tax) contributions
• Non-concessional contributions: 10 facts about new $100,000 cap
• New $100,000 cap: Cut to non-concessional contributions cap
• Bring-forward rule: A definitive super guide