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What are carry-forward concessional contributions?

An annual cap of $27,500 applies to concessional (before-tax) super contributions.

It used to be a case of ‘use it or lose it’ – if for any reason you couldn’t contribute the maximum annual concessional contribution amount to your super, the opportunity was lost and your cap was reset for the next financial year.

Under the carry-forward concessional contributions rules, which came into effect on 1 July 2018, you can accumulate unused concessional contributions and carry them forward, to be used in future years on a rolling basis for five years.

Who stands to benefit?

The carry forward provisions offer flexibility for people who have periods in which they make little or no super contributions. This includes people who take time out of work, work part-time, or have ‘lumpy’ income. Allowing people to carry forward unused concessional cap amounts provides an opportunity to ‘catch-up’ if you have the capacity to do so.

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.

To be eligible to make carry-forward concessional contributions, your total Super Balance at 30 June of the prior financial year must be under $500,000. Your Total Super Balance is calculated by adding together all the amounts you have in accumulation phase of super, plus the retirement phase value of your super and any rollovers in transit between super funds at 30 June of the prior financial year.

How does it work?

Unused concessional contribution amounts carry forward to the next financial year, and are added to your total concessional contributions cap. Amounts that have not been used after five years will expire. Only unused amounts from 1 July 2018 onward can be carried forward.

A simple example

In 2018-2019 Marguerita worked full-time. Her total super balance as at 30 June 2018 was $250,000, so she is eligible to make carry forward contributions.

Marguerita’s before-tax contributions (employer and salary sacrifice) totalled $10,000. In 2019-2020 Marguerita received a personal bonus of $20,000, and chose to put that into super as a deductible contribution, along with her regular before-tax contributions of $10,000 (total of $30,000).

The following year, Marguerita reduced her working hours to complete some study, so her super contributions also reduced.

In order to make up for the reduced contributions while she was studying, Marguerita chose to make additional contributions using money left to her by her grandfather when he passed away. She was able to make total contributions of $50,000 in the 2021-2022 financial year.

The table below shows how Marguerita used the carry forward provisions.

2018-2019 2019-2020 2020-2021 2021-2022
General cap $25,000 $25,000 $25,000 $27,500
Cumulative cap $25,000 $40,000 $35,000 $57,500
Contributions $10,000 $30,000 $5,000 $50,000
Carry-forward $15,000 $10,000 $30,000 $7,500

Next steps

If you’d like to take advantage of the carry-forward concessional contribution rules, the first step is to check that your Total Super Balance is under $500,000. The easiest way to do this is to contact your super fund (or funds, if you have you super in more than one place). You’ll also find the latest balances reported to the ATO through the MyGov online service.

Once you’ve confirmed that you’re eligible, you’ll need to work out the amount you have available to carry forward. This means looking at the concessional contributions for previous years (2018-2019 onward) compared to the concessional contributions cap in that year. Your super statements will detail your concessional contributions, or you can contact your super fund and ask them to confirm the amount for you.

Once you’ve worked out how you’d like to use the carry-forward provisions, liaise with your super fund and find out how to make your personal contribution.

Related articles

Boost your super and claim a tax deduction by making a personal tax-deductible contribution

Using the ‘bring-forward’ rule to make up to three years’ of non-concessional contributions

Help grow your partner’s super savings and claim a tax offset for yourself using the spouse contributions tax offset

See if you’re eligible for the federal government’s low income super tax offset

General disclaimer

This content is intended only to provide a summary and general overview of the subject matter covered. It is not intended to be comprehensive nor does it constitute advice. We attempt to ensure that the content is accurate and current but we do not warrant the content nor its currency. You should seek professional advice before acting or relying on any of the content.

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