Superannuation contribution changes

For the first time in three years, the superannuation contribution caps will rise, effective 1 July 2024.

In conjunction with the stage three tax cuts, some pre-retirees and retirees may now have some additional disposal income to make into their superannuation fund.

Summary of contribution changes

Contribution typeCap to 30 June 2024Cap from 1 July 2024
Concessional contributions – (Employer salary sacrifice contributions and personal tax-deductible contributions)$27,500 per annum$30,000 per annum
Non-concessional – tax free contributions (eligibility criteria must be satisfied, refer below)$110,000 per annum$120,000 per annum
Non-concessional contribution – bring forward provisions (eligibility criteria must be satisfied, refer below)$330,000 over a 3-year period$360,000 over a 3-year period

Work test requirements

The superannuation work test requirements are still in place for individuals over 67 who wish to contribute personal tax-deductible contributions. The work test requires gainful employment for at least 40 hours during a consecutive 30 day period in the financial year in which contributions are made.

This is an annual test, which means once you meet this test you can make contributions for the entire financial year.

Non-concessional contributions (NCC) – eligibility criteria

The eligibility criteria to contribute NCC is dependent on the member’s superannuation total superannuation balance (TSB) from the previous financial year. If the TSB is equal to or more than the general transfer balance cap, (currently at $1.9 million) at the end of the previous financial year, the members non-concessional contribution cap will be NIL for the current financial year.

Current thresholds and caps up to 30 June 2024Thresholds and caps from 1 July 2024
TSB at 30 June 2023 – NCC capTSB at 30 June 2024 – NCC cap
$1.9mill or above – $NIL$1.9mill or above – $NIL
$1.79 mill – $1.9 mill – $110,000$1.78mill – $1.9mill – $120,000
$1.68mill – $1.79 mill – $220,000$1.66mill – $1.78mill – $240,000
Less than $1.68 mill – $330,000Less than $1.66 mill – $360,000

Clients wishing to maximise their NCC using the bring forward provisions may wish to consider restricting their NCC in the 2023/24 year to $110,000 or less so they do not trigger the bring forward rule this year.  The new limits above would not apply to superannuation fund members who have previously triggered the bring forward rule and are still within their bring forward three year period.

Prior to making any superannuation contributions, we highly recommend you contact Victoria Kogan, EQ8 Accountants’ superannuation specialist.

Note: The information provided is of a general nature only and does not take into account your specific needs or circumstances.