Superannuation Updates:
What You Need to Know for 2024-2025

In this update, we cover the latest changes to contribution caps, eligibility criteria, and strategies to maximise your super. Whether it’s concessional contributions, non-concessional contributions, or specialised strategies like downsizer and catch-up contributions, there’s an opportunity for everyone to boost their retirement savings.

Contribution strategies 2024-2025 Opportunities

Whilst concessional and non-concessional contributions are commonly understood to be tax deductible and from after-tax monies respectively, this newsletter sets out the strategies available for your consideration.

As always, we are happy to discuss and assist you as there is never a one size fits all scenario.

Contribution caps have changed effective 1 July 2024

• Concessional $30,000 per annum
• Non-concessional contribution $120,000 per annum

However, the total super balance (TSB) has not changed and remains at $1.9M.

Provided you have not triggered a bring forward event in a prior year and your members balance is less than $1.9M on 30 June 2024 across all superfunds, then the bring forward caps are as follows.

There is no longer a work test requirement to make non-concessional contributions (NCC) and the maximum age to make a NCC is 28 days after the end of the month in the year that you turn 75 years of age.

I am over 67 years of age and not > 75 years what can I contribute into super:

• Mandated compulsory employer super contributions.
• Non-concessional including bring- forward arrangements based on your TSB.
• Downsizer contributions.

The order and timing of making these contributions are imperative as NCC’s are impacted by your TSB but the downsizer is not.

Downsizer contributions

In essence this applies to anyone who has sold their principal place of residence that has been held for at least 10 years. You and your spouse can make up to a maximum contribution of *$300,000 each as a downsizer contribution as long as you meet the following criteria.

• Meets the principal place of residence test.
• Held for at least 10 years.
• Must be > than 55 years of age.
• Can only use the downsizer provisions once.
• Contributions must be received no later than 90 days from the time of settlement.
• Provide your superfund with a completed downsizer form either before or at the time of making the contribution.

*The maximum you can contribute is the lesser of $300,000 or the sale price of your home.

It is essential the contributions are made and the form completed in the right timeframe, because if it’s not the contributions will be treated as a non-concessional contribution.

One of the advantages of this contribution, is there is no maximum age limit unlike other types of contributions.

Catch up contributions- prior 5 years, lose it or use it.

To be eligible for catch up your members balance across all superfunds must be < than $500,000 on 30 June 2024. Must meet the normal concessional contribution eligibility criteria.

The test needs to be reviewed annually.

Recall contribution caps have changed over time.

 The catch up applies by using the current years contribution cap $30,000 first, then using the oldest available next, i.e. 19/20 balance, to see what remains.

This is best utilised in a year with extremely high personal income to claim the deduction.

Note if you are subject to Division 293 tax (your income and concessional contributions > $250K you may be subject to an additional 15% tax on the concessional contributions), the catch concessional contributions will be caught in the additional tax.

Contribution splitting – transferring one spouses super to the other.

Whilst not commonly utilised it allows up to 85% of a member’s concessional contributions that has been made by one spouse of which tax has been paid on, to be transferred or rolled over to their spouse in the following financial year. This may assist to even out balances between partners.

The way it works:

• An ATO superannuation contribution splitting application form must be completed after the year the contribution was made and sent to the superfund outlining the amount to be split with your spouse. e.g. Bob has employer contributions of $20,000 FY ended 2025, in August 2025, Bob completes the form and sends it to his fund to request a contribution split of $17,000 with his wife Jane. The fund then transfers $17,000 from Bob to Jane. (note 15% tax must be paid on the $20,000 leaving $17,000 available to be split).
• It is a way of increasing your spouse’s members balance from the contributions you have made.
• In the year, the concessional contributions are made the receiving member is subject to the normal contribution rules and tax 15%.
• Your spouse who is receiving the split must be < 65 years of age and not retired.
• Only employer, salary sacrificed, and member deductible contributions can be split.

This strategy may assist in reducing a member’s balance so they may be eligible for carry forward NCC or catch-up contributions.

Another benefit may be to assist with equalising members balances so both members may get the full benefit of being in pension phase, rather than one member having a balance siting in accumulation phase and their spouse having a small pension account with unused transfer balance caps available to commence further pensions.

Re-contribution strategy

Whilst this strategy was commonly used prior to 30 June 2017, as there was no limit on how much a member could have in pension phase, you would frequently see a member who was in pension phase withdrawing their minimum pension then recontribute some if not all the amount back as a contribution to the fund. Typically, this was followed by the member commencing a new pension with these new contributions. This strategy was commonly used amongst those who did not rely on their pension payment as they had plenty of money outside the super environment. This round robin of monies kept the money in the superfund environment where there was little to no tax.

Even though there is now a limit on the amount that one may have in pension phase there are still other benefits for using the recontribution strategy assuming you are eligible including the below:

• For those who have not used their full transfer balance cap, this can be used to withdraw balances that have a high taxable component and recontribute as NCC, converting the taxable component to tax free which will be beneficial for estate planning.
• With unequal balances between spouses, amounts could be smoothed out between them. This may be a way to keep more money in the super environment as well as plan for certain contribution strategies that require certain super balances in order to be eligible.
• Whilst Divisions 296 has progressed to the Senate, and the outcome remains unknown this may assist with the potential $3 Million proposed Division 296 tax, by reducing a pension balance to under $3M and recontributing to the spouse with an extremely low super balance or another family member all together.

As always, we are here to assist you, reach out to either Sharon Gdanski or your director relationship to see if you are eligible or any of these strategies may assist you.

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The above summary is intended to be general in nature. Should you believe that any of the above matters may be relevant to you or your Group’s particular circumstances, please discuss the specific details with your Slomoi Immerman Partners advisor.