PMD’s Superannuation Update

A core part of the professional expertise we provide our clients is to ensure they are able to optimise contributions to their superannuation. 

In recent weeks, a number of important changes have been finalised, and for your reference, this information is summarised below.  However you can be assured, that if you are able to take advantage of some of these opportunities which include changes to both the concessional and non-concessional contributions caps, Tim and James will be raising these matters with you as part of their ongoing planning of your portfolio. 


In addition to changes to the contributions cap, there is also an easy way to further build your retirement savings by using a carry-forward contribution.  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. Once again, if you are able to benefit from this option, we will guide you through the process.


1. New Contributions Caps for 2021/22

From 1 July 2021, the concessional contributions cap will increase from $25,000 to $27,500.  We will work with you to determine the impact of this change on any additional concessional contributions you will be able to make.  This change automatically flows through to an increased non-concessional cap – the existing $100,000 cap will become $110,000 from 1 July 2021, meaning eligible clients can make more after-tax contributions. 


2. General Transfer Balance Cap to Increase

As previously advised, the ATO have announced that the general transfer balance cap will increase to $1,700,000 on 1 July 2021. The general transfer balance cap is currently $1,600,000. The new $1,700,000 transfer balance cap will allow more superannuation interests to be rolled over to retirement phase income streams and allow eligible clients to make non-concessional contributions. An important point to note is that individuals who had a personal transfer balance account before 1 July 2021 will have a personal transfer balance cap calculated proportionally based on the highest balance of their transfer balance account. Their personal transfer balance cap will not be increased if, at any time before 1 July 2021, the balance of their transfer balance account met or exceeded $1.6 million.


3. Implications for you

The increased transfer balance cap, concessional and non-concessional caps will allow eligible clients to accumulate more superannuation.  The table below highlights the bring forward thresholds and amounts for 2021/22.  While this is good news for clients who wish to accumulate more retirement savings in a concessionally taxed structure, there are some important planning considerations, specifically the timing of large non-concessional contributions which Tim and James will cover with you if this is a potential issue.


Total Super Balance at 30 June 2021Non-concessional contribution
cap/bring forward rules
$1.7m or more$0, no bring forward
$1.59m or more but less than $1.7m$110,000, no bring forward
$1.48m or more but less than$1.59m$220,000, 2 year bring forward period
Less than $1.48m$330,000, 3 year bring forward period


4.Carry-Forward Contributions – What are they and who can benefit?

An easy way to boost the balance of your super account is to make a carry-forward contribution.  This means if you don’t use the full amount of your concessional contribution cap ($25,000 in 2019/20 and 2020/21), you can carry forward the unused amount and take advantage of it up to five years later. After five years, any unused amounts expire.   There are eligibility rules to make a carry-forward contribution - 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 2020/21, your TSB must have been under $500,000 on 30 June 2020.  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.

Once again, if you are likely to be impacted by any of these changes, we will cover this matter with you as part of your planning meeting but please call Tim or James if you have any immediate queries given the complexity of some of these changes and how they may impact your superannuation planning.


Please continue to contact our office on 03-9824-0001 if you have any issues you’re needing to discuss with the PMD team.

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