How To Monitor Carried Forward Concessional Contributions
You may be eligible to make concessional contributions that are greater than the annual cap if you haven’t fully used your concessional cap in an earlier year. This could help you to save even more for retirement, while also managing tax.
What are concessional contributions?
There are a number of ways you can contribute to superannuation. Depending on certain factors, contributions may be categorised as concessional or non-concessional.
There are also other types of contributions that are not considered to be either concessional or non-concessional.
Concessional contributions (CCs) commonly include:
contributions made for you by your employer
salary sacrifice contributions, and
personal contributions that you claim as a personal tax deduction.
CCs (within your cap – see below) are taxed at the concessional rate of up to 15% (or up to 30% if your income (1) from certain sources exceeds $250,000) within your super fund. However, additional tax and penalties may apply for contributions made in excess of your cap.
Non-concessional contributions include those made with after-tax money, such as your take-home pay, or funds in your bank account. A different cap applies to non-concessional contributions. See ato.gov.au
What are carried forward concessional or ‘catch up’ contributions?
Caps apply to limit the contributions you can make to superannuation without having to pay additional tax and other penalties. The cap that applies depends on the type of contribution made. Contributions that are considered to be ‘concessional contributions’ count towards the annual
CC cap. From 2018/19 to 2020/21, this annual cap was $25,000 (2), which then increased to $27,500 in 2021/22 and will remain at $27,500 in 2022/23.
If you don’t fully utilise your CC cap in a year, you’re able to ‘carry forward’ the unused cap amount, and you may be eligible to make ‘catch up’ concessional contributions in a subsequent year. The 2018/19 financial year was the first year you were able to start accruing unused CCs, meaning that the first year you were able to make catch up CCs was 2019/20.
what eligibility criteria apply?
To be eligible to make catch up CCs you need to:
have a total ‘total super balance’ (3) at the 30 June prior less than $500,000, and
be eligible to make super contributions. You are eligible if under age 67. If you’re 67 or older, you need to have met the work test in the financial year you’re making the contribution or be eligible for the work test exemption.
Remember that you can only carry forward unused CCs for 5 years, after which they expire.
(1) Income for this purpose includes taxable income, reportable fringe benefits, total net investment losses and low tax contributions
(concessional contributions that are within your concessional cap).
(2) Cap may be indexed in future years.
(3) Total super balance includes the total of all amounts you hold in super accumulation and pension accounts, in-transit rollovers, and if you
have a self-managed super fund, it may also include the outstanding balance of a limited recourse borrowing arrangement. The total is
reduced by personal injury or structured settlement contributions made to super.
How to access carried forward CC details on MyGov
There are a few ways you can monitor your available carried forward CCs. This includes:
keeping detailed records of all the contributions you and others (such as your employer) have made to your super accounts for the last 5 years
contacting your super funds to check what contributions have been received to your account in the past (including the accounts you may have closed), and
checking your details on MyGov.
On the following pages, the steps to using MyGov to access your carried forward CC information are explained. However, it is recommended that detailed records also be maintained, and that you refer to your own records rather than relying only on the information in MyGov. This is because there may be a delay before your super fund reports details about your contributions to the ATO. Remember, additional tax applies for excess contributions.
Step 1
Login to your MyGov account by visiting the following page my.gov.au and select the ATO service
STEP 2
Don’t have a MyGov account or haven’t linked ATO?
If you don’t already have a MyGov account, you’ll need to set one up.
The ATO needs to be added as a linked service to enable you to access information relating to your superannuation. For instructions on how to do this, please see: https://www.ato.gov.au/General/Online-services/Create-your-myGov-account-and-link-it-to-the-ATO/
STEP 3
Select the ‘Super’ Tab
STEP 4
Click the ‘Information’ option and then select ‘Carry forward concessional contributions’
STEP 5
Use the arrow (red circled) To reveal a drop-down list to select a financial year. Your TSB as at the 30 June prior to the relevant financial year is displayed, and also whether or not you’re eligible to make catch up CCs (blue circles).
Your unused CCs available To carry forward is also displayed (black circled). Click on ‘show details’ (green circled) to reveal how this figure was calculated in more detail (ie actual CCs and unused amounts for each financial year).
Information will be provided based on the data held by the ATO.
step 6
After clicking on ‘show details’, data for the financial year selected is displayed that shows total carried forward amounts available (black circled) and total CCs (green circled) reported, and also reported amounts from each financial year.
Note that this information is based on the data provided to the ATO by super funds for that financial year.
Note: The information shown reflects the information that the ATO has received from your super funds to that point. If there is a delay in
any of your funds reporting to the ATO, or there has been an error in reporting, the information displayed will not be accurate. Therefore, it
is important to maintain your own records and ascertain contribution information from other sources such as your super fund.
STEP 7
HOw do I know if my ‘total super balance’ was less than $500,000 at the prior 30 June?
Your TSB as at the prior 30 June and eligiblity for carry forward CCs is displayed in the ‘Carry forward concessional contributions’ page on ATO Online (circled in blue in steps 5 and 6).
step 8
For more information
Contribution rules and eligibility criteria for catch up CCs are complex. This guide is not designed to provide comprehensive information about how the rules work or apply to you.
Your financial adviser may ask you details about your available carried forward CCs as it appears on MyGov when providing advice to you. This guide is designed to help you find this information on MyGov.
It is important that you speak with your financial adviser or visit the ATO website for more information.
GENERAL ADVICE WARNING
The advice contained within this document does not consider any person’s particular objectives, needs or financial situation. Before making a decision regarding the acquisition or disposal of a Financial Product, persons should assess whether the advice is appropriate to their objectives, needs or financial situation. Persons may wish to make their assessment themselves or seek the help of an adviser. No responsibility is taken for persons acting on the information within this document. Persons doing so, do so at their own risk. Before acquiring a financial product, a person should obtain a Product Disclosure Statement (PDS) relating to that product and consider the contents of the PDS before making a decision about whether to acquire the product.