How carry-forward (catch-up) super contributions work

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What are carry-forward contributions?
Who can benefit from carry-forward contributions?
What are the eligibility rules?
How carry-forward contributions work: 3 case studies
5 steps to calculating your carry-forward amount

If you feel like you’ve missed the boat when it comes to building your retirement savings, it could be time to use an often overlooked opportunity to put a little extra into your super.

Making a carry-forward contribution can be an easy way to boost the balance of your super account if you have cash to spare.

So, what is a carry-forward contribution and are you eligible to make one?

What are carry-forward contributions?

Carry-forward contributions are not a special type of super contribution; they simply allow super fund members to use any of their previously unused concessional contributions cap (or limit) on a rolling basis for five years.

This means if you don’t use the full amount of your concessional contributions cap ($27,500 in 2021–22), you can carry forward the unused amount and take advantage of it up to five years later. (From 1 July 2017 to 30 June 2021, the annual general concessional contributions cap was $25,000.)

Expiry of unused concessional contributions caps

After five years, any of your unused concessional contributions cap amounts will expire.

Financial year of unused concessional contributions cap	Last financial year in which unused cap can be used
2018–19	2023–24
2019–20	2024–25
2020–21	2025–26
2021–22	2026–27
2022–23	2027–28
2023–24	2028–29

Learn more about concessional super contributions.

Good to know: Carry-forward contributions were originally called catch-up contributions when first announced in the 2016 Federal Budget. They are now generally referred to as carry-forward concessional contributions.

The rules permitting you to make carry-forward concessional contributions have nothing to do with the bring-forward rules, which allow you to make larger non-concessional (after-tax) contributions into your super account over a three-year period.

Who can benefit from carry-forward contributions?

Carry-forward contributions were introduced 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.

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. This includes women who work part time or take time off to care for children or other family members and people who have time out of the workforce for caring responsibilities, further studies, or due to physical or mental illness.

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.

Making additional concessional contributions can be a tax-effective way to grow your retirement savings, as these before-tax contributions are only taxed at 15% as they enter your super account, rather than at your marginal tax rate (which can be up to a maximum of 47% including the Medicare levy). Any earnings you receive on your contributions once they are in your super account are also taxed at only 15%.

Need to know: The first financial year in which you could access your unused concessional contributions cap was 2019–20.

Only unused concessional contribution cap amounts from 1 July 2018 onwards can be carried forward. So if, for example, you want to use the carry-forward rule in the 2021–22 financial year, you can only carry forward unused concessional caps for the previous three financial years.

What are the eligibility rules?

There are two conditions to meet before you can use your unused concessional cap amounts:

Your Total Super Balance (TSB) must be under $500,000 at 30 June in the previous financial year. For example, if you want to make a carry-forward concessional contribution in 2021–22, your TSB must have been under $500,000 on 30 June 2021.
- 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.
- If your TSB falls below $500,000 at a later date, you are once again eligible to apply any of your unused concessional contributions cap in a future financial year.
You have made concessional contributions in the financial year exceeding the annual general concessional contributions cap ($27,500 in 2021–22)

For more information, see SuperGuide article Total Superannuation Balance: When it applies and what is included.

Need to know: The amounts of your unused contributions cap are applied in order from the earliest financial year to the most recent financial year.

After all your available unused concessional cap amounts are applied by the ATO, if you have excess concessional contributions, you may be required to pay extra tax on your excess contributions.

How carry-forward contributions work: 3 case studies

Case study 1

Sylvia has a $200,000 balance in her super account. During 2020–21 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 (2021–22), she can contribute $52,500 in concessional (before-tax) contributions into her super account.

The $52,500 consists of her normal $27,500 annual concessional contribution cap for 2021–22, plus $25,000 from her unused 2020–21 concessional contribution cap that she 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 2020–21, the total concessional contribution amount into his super account was $10,000. This left an unused concessional cap amount of $15,000 ($25,000 – $10,000 = $15,000).

This means in 2021–22 Leyton can contribute $42,500 in concessional contributions into his super account. The $42,500 consists of his annual general concessional contribution cap of $27,500 for 2021–22, plus the $15,000 unused concessional contribution amount from 2020–21 carried forward.

The entire $42,500 in concessional contributions will be taxed at 15% when it enters Leyton’s super account.

Case study 3

In 2021–22, Kylie plans to use some of her unused concessional contributions cap amounts to make a concessional contribution on top of her part-time employer’s concessional SG contribution of $5,000.

On 30 June 2021 Kylie’s Total Super Balance was $180,000. She has unused concessional contribution cap amounts from the previous three financial years ($20,000 x 3 years) as her employer’s SG contributions did not use up her full annual cap. This means she is now eligible to make a carry-forward concessional contribution of up to $60,000.

	2018–19	2019–20	2020–21	2021–22
Annual general concessional contributions cap	$25,000	$25,000	$25,000	$27,500
Concessional contributions into Kylie’s account	$5,000	$5,000	$5,000	$52,500
Available unused concessional cap	$20,000	$20,000	$20,000	nil
Cumulative available unused concessional cap	$20,000	$40,000	$60,000	$35,000

Kylie decides to make a concessional contribution of $52,500 in 2021–22, which would exceed her normal concessional cap by $25,000. However, Kylie can use the full amount of her unused contribution cap from 2018–19 ($20,000) plus $5,000 of her unused contribution cap from 2019–20, giving her the extra $25,000 contribution cap amounts she needs.

The amounts of Kylie’s unused contributions cap are applied in order from the earliest financial year to the most recent financial year.

The remaining $35,000 in unused concessional contributions cap amounts from 2019–20 and 2020–21 roll forward and can be used in future years.

5 steps to calculating your carry-forward amount

Contact your super fund (or funds if you have several super accounts) for a current valuation of all your super accounts to work out your Total Superannuation Balance (TSB).
Check the last reported balance for all your super accounts with the ATO. This information is available online via the government’s myGov website.
Ensure your TSB is under $500,000.
Check your concessional contributions for previous years and compare this with the contribution cap applying that year.
Work out the amount you have available to carry forward from your unused concessional cap. (Some super funds list this information on your annual contribution statement.)

Need to know: It’s important to keep track of how much you have made in concessional contributions each year. If you contribute more than you are allowed under the rules, the excess amounts will be taxed at your marginal (or top) tax rate.