Concessional contribution cap – before tax deductions
Concessional contributions consist of:
- member concessional contributions that are deducted against your income (Sec 290-170 notice)
- employer super guarantee contribution obligations and/or
- salary sacrifice arrangement paid by your employer.
You can contribute up to $27,500 per person for the year ended 30 June 2022.
Concessional super contributions are taxed at 15% in your super fund and must be received by 30 June 2022.
Unused carry forward concessional contributions
Carry forward arrangements are available so you may access unused concessional cap amounts from previous years.
The eligibility criteria to make carry-forward concessional contributions are as follows:
- For the FY ended 2022 if the member is younger than < 67 years; no work test required
- If aged 67 but younger than < 75 – must pass the work test#
- Total superannuation balance must be less than < $500,000 as at 30 June 2021.
- Carry-forward concessional contributions can be made via a salary sacrifice arrangement and/or member deductible contributions.
If this is of interest, please contact us as there are other factors that need to be considered to ensure you don’t inadvertently exceed your concessional contribution caps.
Non- concessional contribution cap- after tax contributions
Non-concessional (after tax) may help you to increase your retirement savings and are not assessable in the fund upon receipt.
You may contribute up to $110,000 per person for the year ended 30 June 2022, but the cap that applies to you personally may be different.
It could be:
- higher, if you are under 67 years old and are eligible to use the ‘bring -forward’ option to make non-concessional contributions of up to three times the annual cap in a single year, see below table based on you total super balance at 30 June 2021 or
- nil, if your total super balance on 30 June 2021 was $1.7 million or more.
Bring Forward Option
|Total super balance
30 June 2021
|Non- concessional contribution cap for the first year||Bring forward period|
|Less than $1.48 million||$330,000||3 years|
|$1.48 million to < $1.59 million||$220,000||2 years|
|$1.59 million to < $1.7 million||$110,000||No bring forward period applies|
|$1.7 million or more||0||Not applicable|
Work test and the types of contributions that can be made:
In order to make member concessional contributions to your super once you turn 67, you must be able to show that you have been gainfully employed for at least 40 hours over a continuous 30-day period . This is called the work test.
Gainfully employed would not cover passive income such as dividends, rental, or volunteer charity work. If you are unsure how this may impact you, please contact us.
The ability to make any type of contribution will require you to review your total super balance, age, and the work test.
If < 67 no work test is required, you can make:
- member voluntary contributions (member deductible and salary sacrifice)
- non- concessional contributions (NCC)
- can trigger the bring forward three years
If 67 but < than 75 you can make:
- member voluntary contributions (member deductible, salary sacrifice, non-concessional or spouse contributions)
- only if you must pass the work test
- 75 years of age, contributions must be received before turning 75 years old or within 28 days after the end of the month of turning 75.
If 75 years of age or > you can only make mandated industry award contributions or the downsizer contributions
Forms of contributions
Contributions can be in the form of cash or in specie transfer of certain assets.
There are restrictions on what types of assets a fund can accept as a contribution from a member (in-specie transfer), and they are generally limited to:
- Off market transfer of listed shares or
- Business real property.
Any off-market transfers must be at market valuation.
If you are you over the age of 65 (this will change to 60 years effective 1 July 2022) and have recently sold, or considering selling your principal place of residence that you have owned for at least the last 10 years, each spouse may be able to contribute up to an additional $300,000 each.
Recontribution of your Covid 19 released amounts
If you applied for an early release authority during the financial years ended 30 June 2019 or 2020 and would like to recontribute some or all of these amounts, let us know so we may assist you in the process to ensure these recontributed amounts don’t get counted towards your non-concessional contribution caps.
Pensions – Income Stream
Please ensure you have withdrawn the minimum income stream requirement in the form of cash prior to 30 June 2022.
Failure to withdraw the minimum income stream or a pro-rata amount (prior to a full commutation) could result in the fund losing its tax exemption on the income supporting the pension account.
To calculate your minimum payment, multiply the percentage in the below table by your pension account balance at 1 July each year.
If you commence a pension after 1 July, the minimum is calculated on a pro-rata basis for that financial year.
If < 60 there will be withholding tax that will be required to be paid to the ATO.
If you would like to withdraw more than the minimum income stream, please contact us to assist with how to best maintain the longevity of your pension balance.
Minimum Pension table
|Age||Minimum pension payment 2022 and 2023|
|95 or more||7%|
If you are considering commencing an income stream on 1 July 2022, please contact us so we may prepare pension commencement documents and lodge a transfer balance account report with the Australian Taxation Office.
If you would like to discuss any of the above or any other superannuation matters that Slomoi Immerman Partners can assist you with, please reach out to Sharon Gdanski.