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Cap on non-concessional contributions

Cap on non-concessional contributions

The Government has currently set a cap, called the non-concessional contributions cap, on the amount of non-concessional contributions you can make in a financial year (i.e. 1 July to 30 June) before additional tax applies. From 1 July 2017, you can contribute a maximum of $100,000 a year if you are aged between 65 and 74, and meet the work test*. If you are under age 65 at 1 July of the financial year, you may be able to contribute up to three times the annual non-concessional contribution cap under a ‘bring forward’ arrangement. The non-concessional cap you can bring forward and whether you can bring forward two or three year’s worth of non-concessional contributions depends on your total super balance. These conditions are outlined in the table below.

Total super balance as at previous financial year First year non-concessional contribution cap Period brought forward 
Less than $1.4 million $300,000 3 years
$1.4 million to less than $1.5 million $200,000 2 years
$1.5 million to less than $1.6 million $100,000 Nil
$1.6 million Nil Nil

The three-year period starts with the year that you first contribute more than the non-concessional contributions cap and your contributions must not exceed a maximum of $300,000 over a period of three years. The Government co-contribution is not counted towards the non-concessional contributions cap, however spouse contributions count towards the spouse’s non-concessional cap.

The cap is applied per person, not per super fund. This means if you have more than one super fund, all non-concessional contributions made to all of your funds (including any defined benefit funds) are added together and count towards the same cap. If you exceed the cap, any non-concessional contributions above the cap will be taxed at 47% including Medicare levy.

* Work test: The recipient of the contribution must have worked at least 40 hours in not more than 30 consecutive days in the financial year that the contribution is made.