With a new financial year upon us, you may be thinking about what contribution caps apply for the 2019/20 financial year.
The concessional contributions cap remains at $25,000 for the 2019/20 year.
However, new rules allow an individual’s concessional cap for the 2019/20 year to be increased by the unused portion (if any) of their concessional cap for the 2018/19 year. This increased cap amount may be utilised in the 2019/20 year provided the individual’s total superannuation balance was less than $500,000 at 30 June 2019.
Broadly speaking, total superannuation balance is all of the money an individual has in superannuation across all superannuation funds to which they belong. Importantly, it is not just the amount in their SMSF.
The concessional contribution cap captures both employer contributions (including superannuation guarantee and salary sacrifice contributions) and personal contributions where a tax deduction is being claimed.
The non-concessional contributions cap for the 2019/20 year remains at $100,000 for individuals who had a total superannuation balance of less than $1.6m at 30 June 2019. Individuals who had a total superannuation balance of $1.6m or more at 30 June 2019 are unable to make any non-concessional contributions in the 2019/20 year without exceeding their cap (ie their cap is $nil).
The non-concessional cap captures personal contributions where a tax deduction is not claimed or contributions are made for a spouse.
As you may be aware, in certain situations, it is possible to “bring forward” the non-concessional contributions cap from a future year and use it in the current year. The bring forward amount and periods are shown in the table below.
| Total Superannuation Balance on 30 June 2019 | Bring Forward Amount if triggered in 2019/20 | Bring Forward Period if triggered in 2019/20 |
|---|---|---|
|
Less than $1.4m |
$300,000 |
3 years |
|
≥ $1.4m but less than $1.5m |
$200,000 |
2 years |
|
≥ $1.5m but less than $1.6m |
$100,000 |
n/a |
|
$1.6m or more |
$nil |
n/a |
Since 1 July 2018, some individuals have been eligible to make a new type of contribution called a “downsizer contribution”.
Generally speaking, an individual is eligible to make a downsizer contribution if they are over age 65 when the contribution is made, they sell their home on or after 1 July 2018, and they owned the home for at least the last 10 years.
Importantly:
But:
Downsizer contributions are limited to the lesser of:
Meg Heffron provides more information about downsizer contributions and their potential uses.