In this guide
If you feel like you’ve missed the boat when it comes to building your retirement savings, don’t despair. You may be eligible to use an often-overlooked opportunity to put a chunk of cash into your super and reduce your tax bill at the same time.
Using the carry-forward rules to contribute more than the standard annual concessional cap is an easy way to boost your super balance if you have cash to spare.
So, how does it work, and are you eligible?
What are carry-forward contributions?
Carry-forward contributions are not a special type of super contribution; they simply allow super fund members to use some or all 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, you can carry forward the unused amount and take advantage of it up to five years later.
Expiry of unused concessional contributions caps
After five years, any of your unused concessional contributions cap amounts will expire.
| Financial year | Concessional cap for the year | Last financial year in which unused cap can be used |
|---|---|---|
| 2019–20 | $25,000 | 2024–25 |
| 2020–21 | $25,000 | 2025–26 |
| 2021–22 | $27,500 | 2026–27 |
| 2022–23 | $27,500 | 2027–28 |
| 2023–24 | $27,500 | 2028–29 |
| 2024–25 | $30,000 | 2029–30 |
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.
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 useful for people who find they have more disposable income later in life due to reduced household costs, such as mortgage repayments or school fees, and want to boost their super balance in the lead-up to retirement.
Anyone who wants to contribute more than the standard concessional cap in one financial year can benefit, so long as they meet the eligibility rules below.
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%.
