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BIS Cosgrove Accountants Gold Coast & Brisbane

Use It Or Lose It: Last Call for Carry Forward Concessional Super Contributions

Saving for retirement is a priority for many Australians, and superannuation is a key vehicle for building that nest egg.

With less than halfway to go until the end of the 2023/24 financial year, don’t forget that your ability to use your “carry forward concessional contribution” cap from the 2019/2020 year will expire at June 30 2024.

In other words, if you haven’t taken advantage of potential carry forward concessional contributions by then, make sure you do so by 30 June 2024, or you could be leaving money on the table.

What is a carry forward/catch-up concessional contribution?

Carry forward concessional contributions allow you to make up the shortfall between what you have contributed to your superannuation, and the maximum allowable amount that can be contributed for that year.

From the 2018 to the 2021 financial year, the concessional contributions cap was $25,000; increasing to $27,500 from 1 July 2021.

Let’s say you didn’t use your full concessional contribution cap in the past five years. This unused amount can be carried forward for up to five years, starting from the 2019/20 financial year. In the current financial year (2023/24), you can take advantage of the total accumulated unused cap, providing an opportunity to contribute more to your superannuation than the standard annual concessional limit.

Concessional contributions are typically made up of:

  • Employer contributions,
  • Salary sacrifice contributions, and
  • Personal contributions claimed as a tax deduction.

Am I eligible for carry forward contributions?

As long as your total super balance was less than $500,000 at the previous June 30, these shortfall amounts are able to be carried forward on a rolling 5-year basis, before the oldest year drops away.

As at 1 July 2024, any unused cap from the period 1/7/2019 to 30/06/2020 will no longer be available to you to make additional contributions.

Why should I utilise carry forward concessional contributions?

Catch-up concessional contributions are a strategic tool that allow you to boost your retirement savings and access potential tax advantages. A valuable option when leveraged effectively, you can optimise your superannuation contributions, help manage tax liabilities and secure a more comfortable retirement.

Carry forward contributions can be most effective if you have a large Capital Gain from the sale of a property or shares, and wants to maximise your tax strategy and savings on the amount owing.

As with most complex tax deductions, it is important you are exercising caution when using the strategy. Consider consulting a professional accountant when implementing complex tax strategies and making additional superannuation contributions.

Get in touch with one of our expert accountants or advisors and find out how we can help you ensure you are making the most of your retirement savings, maximising tax strategies and meeting your obligations.

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The material and contents provided in this publication are general and informative in nature only. It is not intended to be advice and you should not act specifically on the basis of this information alone. If expert assistance is required, professional advice should be obtained.