A non-concessional contribution is a personal contribution a person makes to superannuation for their own benefit, or for the benefit of their spouse. Non-concessional contributions are generally made from after-tax income or from other savings. A personal tax deduction is not claimable for non-concessional contributions.
The non-concessional contribution cap is currently $120,000 per annum. In addition, a person aged 74 or younger at the start of a financial year can generally bring forward up to three years contributions and make a non-concessional contribution of up to $360,000.
This three-year bring forward cap is triggered when non-concessional contributions made in a financial year exceed $120,000. When this occurs, the maximum that can then be contributed during the balance of the current financial year, and the next two financial years is capped at $360,000.
The ability to make non-concessional contributions and access the three-year bring forward opportunity is limited by a person’s total superannuation balance. The total superannuation balance is the total of all superannuation accumulation and pension accounts a person holds, calculated on the previous 30 June. Where a person’s total superannuation balance exceeded the general transfer balance cap (currently $1,900,000) they are unable to make any non-concessional contributions.
Where the total superannuation balance is between $1,660,000 and $1,900,000, the amount of non-concessional contributions that can be made under the three-year bring forward opportunity, is reduced.
Tony is 67 years old. He has some money available and would like to maximise his non-concessional contributions. His total superannuation balance on 30 June 2024 was $1,700,000.
Provided Tony had not triggered his three-year bring forward cap in the previous two financial years, he could make a non-concessional contribution in the current (2025) financial year of $220,000.
Tony is unable to use the full three-year bring forward cap of $360,000 as his total superannuation balance on 30 June 2024 was between $1,660,000 and $1,780,000).
The following table sets out the maximum non-concessional contributions (NCC) that can be made depending on a person’s total superannuation balance (TSB).
|
Total Superannuation Balance
|
Maximum Non-Concessional Contribution
|
|---|---|
|
Less than $1,660,000
|
$120,000 + 2 years = $360,000
|
|
$1,660,000 to $1,779,999
|
$120,000 + 1 year = $240,000
|
|
$1,780,000 to $1,899,999
|
$120,000
|
|
$1,900,000 or more
|
$0
|
Referring to our previous example, if we assume Tony’s total superannuation balance on 30 June 2024 is less than $1,660,000, Tony would be able to make a non concessional contribution from July 2024 of up to $360,000.
But remember, irrespective of how much Tony can contribute into his super fund, if he wishes to commence drawing an income from his super, the maximum he will be able to transfer to a pension account will be $1,900,000.
Maximising contributions to superannuation, particularly for people with larger account balances, can be confusing. The essential ingredients to understanding the maximum non-concessional contributions that can be made is the total superannuation balance calculated on the previous 30 June, and the history of non-concessional contributions made in the current and previous two financial years.
Read about concessional contributions here.
Read our 2024-2025 Superannuation and Pension Guide here.
At Progressive Financial Solutions, as part of your overall financial position, we use our expertise to determine if superannuation non-concessional contributions are appropriate for you. Read more about our superannuation services here.