Benefits of Unused Concessional Contributions Caps

Posted at 14:53h in News, Superannuation by Simmons Livingstone

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Did you know a valuable concession is available when it comes to your superannuation contributions cap? It’s called the “unused concessional contributions cap” and it can help you boost your retirement savings.

As of July 1, 2018, individuals with a total superannuation balance of less than $500,000 at the end of the previous income year (June 30), may be able to contribute more than the standard concessional contributions cap. That is, the maximum amount of before-tax contributions you can contribute to your super each year without contributions being subject to extra tax. The annual cap is currently $27,500.

This means you can make additional concessional contributions to utilise any unused cap amounts.

To put it into perspective, consider this scenario: If you didn’t make any concessional contributions in the 2021 income year and your total superannuation balance was below $500,000, you could have contributed up to $55,000 in concessional contributions in the 2022 income year (ie $27,500 for 2021 and $27,500 for 2022).

What’s more appealing is that unused concessional contributions don’t go to waste. They can be carried forward on a rolling basis for up to five years, giving you ample time to take advantage of them.

However, it’s crucial to note that these unused contributions do have an expiration date. After five years, they’ll no longer be available. The 2024 income year marks the first opportunity to access unused caps from all five previous years.

If you find this concession intriguing but need guidance or assistance in navigating its complexities, don’t hesitate to contact us on 1800 618 800 or via email at admin@simmonslivingstone.com.au.

We’re here to help you make the most of this valuable opportunity to supercharge your retirement savings.