Catch-up concessional contributions

From 1st July 2018 fund members with a fund balance of less than $500,000 can make additional catch-up super contributions. The catch-up super contributions are made from unused super contribution caps accruing from 1st July 2018 and can be either personal or salary sacrifice.

As the deductible super contribution cap is now $27,500 per year (previously $25,000), the maximum five-year catch-up super contributions are allowed over a rolling five year period and amounts that have not been used after five years expire.

For example, if a taxpayer has a fund balance of less than $500,000, and made no super contributions in 2019, 2020, 2021, and 2022, then they could make up to $130,000 super contributions in 2023 (year 5).

The catch-up super contributions are most attractive to the following taxpayers:

• Women who have been on maternity leave so have not been using their deductible superannuation contribution caps.
• Farmers or business owners who have inconsistent income.
• Taxpayers are inheriting funds that can be contributed to super while saving themselves tax.
• Taxpayers who have made a substantial capital gain on property or shares.

However, you can’t access your super until you meet a condition of release such as reaching preservation age and retiring.

Contact us for an obligation free consultation or visit ATO website for more information.

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