Contribution caps set to increase

From 1 July 2021, Australians will be able to put more into their super as the concessional and non-concessional contribution caps and the general transfer balance cap are set to increase due to indexation for the first time since July 2017.

Concessional contributions are payments that are made into your super fund before tax. The annual concessional contribution cap will increase from $25,000 to $27,500.

Non-concessional contributions are made into your super account after tax is paid. The annual non-concessional contribution cap will also increase on 1 July 2021 from $100,000 to $110,000.

The other good news is that the maximum amount a member who was under 65 at the start of the year can contribute under the non-concessional contribution cap bring forward rule will increase from $300,000 to $330,0001 from 1 July 2021.

Concessional cap (2021/22)

Non-concessional cap (2021/22)

$27,500 p.a.

Standard cap

Maximum contribution under bring forward rule1

$110,000 per year

$330,000 over a 3 year period

 

The general transfer balance cap (which is a limit on how much super can be transferred into a tax-free retirement account) will increase from $1,600,000 to $1,700,000. The amount of increase will depend on whether you have commenced a tax-free retirement pension previously. As the total super balance limit equals the general transfer balance cap this will also increase to $1,700,000. For example, from 1 July 2021, a person’s non-concessional cap will be nil if their total super balance on 30 June 2021 is $1.7 million or more2.

Book an appointment today

If you would like to speak to someone about how you could benefit from these super contribution cap changes, please contact one of our financial planners. To book an appointment, please call 1300 369 901 (option 2) or visit eisuper.com.au/appointment.

For more information about the new superannuation contribution caps visit the ATO website


1 Assumes member is under age 65 at some time during the year the contribution was made and that their total super balance was less than $1.48m as at 30 June 2021.
2 Colonial First State, Firsttech, Super contribution caps to increase from 1 July 2021.