From financial year (FY) 2021-22 the total superannuation balance threshold, concessional and non-concessional contributions caps will increase, allowing you to contribute more to super.
This article provides a brief overview of the increase in the:
- concessional contributions (CC) cap and carried forward unused CC caps
- non-concessional contributions (NCC) caps and the total superannuation balance threshold for making these contributions.
Total superannuation balance
From 1 July 2021 the general transfer balance cap (TBC), which is indexed to the Consumer Price Index (CPI) will increase from $1.6M to $1.7M. The total superannuation balance (TSB) threshold at which the NCC (Non concessional contribution) cap is nil for a financial year, is equal to the general transfer balance cap. An NCC cap of nil effectively means the client cannot make NCCs.
This means the TSB threshold measured at 30 June 2021 for NCCs made in the FY2021-22 will be $1.7M. Eligible clients with TSBs of less than $1.7M at 30 June 2021 can make NCCs from 1 July 2021.
The Concessional contribution cap is indexed to average weekly ordinary time earnings (AWOTE) in $2,500 increments. This means that as at FYE 2022, the concessional contribution cap will be $27,500 pa.
The Non-concessional contribution cap is four times the Concessional contribution cap and therefore will increase from $100,000 pa to $110,000 pa ($27,500 x 4) from 1 July 2021. This means eligible clients can make more after-tax contributions to superannuation.
The increased caps allow clients to accumulate more superannuation.
For further information, please contact us.