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Not making your full superannuation contribution? Now you can catch up

June 2019


Many Australians do not have the kind of superannuation balances that will set them up for retirement, and 2019 is the first year that enables people who've been out of the workforce to top up. 

2019 is the first year for new measures that enable people who have been out of the work force, like new Mums, to top up their superannuation.

If you have:

·      A total superannuation balance below $500,000 as at 30 June; and

·      Not utilised your entire concessional contributions cap ($25,000) for the year

then you can 'carry forward' the unused amount on a rolling 5 year basis.

For example, if your total concessional contributions in the 2018-19 financial year were $10,000 and you meet the eligibility criteria, then you can carry forward the unused $15,000 over the next 5 years.

You may then be able to make a higher deductible personal contribution in a later financial year. If you are selling an asset and likely to make a taxable capital gain, a higher deductible personal contribution may assist in reducing your tax liability in the year of sale.

Key criteria for topping up your super

  • Your total superannuation balance must be below $500,000 as at 30 June of the prior year before you utilise any carried forward amount (within the 5 year term); and
  • In some cases, an additional 15% tax can apply (30% total) to concessional contributions made to super where income and concessional contributions exceed certain thresholds ($250,000 in 2018-19). Your income could be higher than usual in the year when you sell an asset for a capital gain.

For more information, contact us on 02 9957 4033.

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Disclaimer

This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.

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