You may have heard that the annual cap on non-concessional contributions (NCCs) has increased for 2024–2025. This is great news for superannuation members who want to maximise their retirement savings.
NCCs are your own after-tax contributions, meaning they’re distinct and separate from concessional contributions such as compulsory employer contributions made for you, additional salary sacrifice contributions, and personal contributions you’ve made for which you claim a deduction. From 1 July 2024, the annual cap on NCCs increased from $110,000 to $120,000 due to indexation.
This increase means that the maximum amount that can be contributed under a “bring-forward” arrangement has also increased. A “bring-forward” arrangement allows eligible members to contribute up to three years’ worth of NCCs in a shorter timeframe. This may be an attractive contribution strategy for those with an inheritance, a large bonus payment, or proceeds from the sale of an investment.
If you already commenced a bring-forward arrangement in the last year or two, you won’t get the benefit of the increased NCC cap for that arrangement. However, if you’ve been thinking about commencing one of these strategies, now is great time to consider this further.
You must be aged under 75 at some point in the financial year when you commence a bring-forward arrangement, and your total superannuation balance (TSB) as at 30 June of the previous financial year affects your eligibility.
Be aware that the TSB eligibility limits have changed since last year – and they’ve decreased. So, while the NCC cap and the maximum bring-forward cap have increased, the cut-off points when your eligibility reduces or ceases are lower. Be careful about referring to older advice or information (eg online) that is based on the TSB thresholds for 2023–2024.