Following the release of the latest Average Weekly Ordinary Time Earnings (AWOTE) index, the expected increase to the contribution caps from 1 July 2024 has been confirmed.
The standard Concessional contribution cap will increase from $27,500 to $30,000. The non-concessional contribution cap (NCC), which is expressed as 4 times the standard concessional contribution cap, will increase from $110,000 to $120,000. The maximum non-concessional cap available, under the non-concessional contribution bring-forward provisions, will increase from $330,000 to $360,000. The Total Superannuation Balance Thresholds (TSB), used to determine the maximum amount of bring-forward non-concessional contributions available to an individual, will also be adjusted.
The current regime for concessional and non-concessional caps was introduced back in 2017 when – for the first time – non-concessional contribution caps were linked to the size of a member’s total super balance.
Back then, both the contribution caps and transfer balance cap increased at the same time so the adjustments to the table of non-concessional contribution thresholds for those looking to use the “bring forward” rules made perfect sense (and all the numbers went up).
Since contribution caps are linked to wages (rather than inflation) they have increased very slowly since then – in fact, only once (1 July 2021). From 1 July 2024, we will see an increase in the concessional contributions cap from $27,500 to $30,000. Since the non-concessional contributions cap is 4 x this limit, it will increase from $110,000 to $120,000 (or $240,000 and $360,000 for those using the bring forward rules).
However, the fact that the general transfer balance cap (which is based on inflation instead) won’t increase means we have some interesting changes.
For example, the thresholds for the bring-forward rules (the left-hand column for each year) will go down next year – meaning those hovering around a threshold will find it slightly harder to make sure they’re eligible. For example, someone wishing to initiate a three-year bring forward period this year needed to have less than $1.68m in super on 30 June 2023. The equivalent threshold is lower at $1.66m on 30 June 2024.
The non-concessional contribution caps and thresholds are summarised in the table below:
| Current thresholds and caps (2023/24) | Next year’s thresholds and caps (2024/25) | ||
| TSB at 30 June 2023 | Maximum NCC Cap | TSB at 30 June 2024 | Maximum NCC Cap |
| $1.9m or more | $nil | $1.9m or more | $nil |
| $1.79m – less than $1.9m | $110,000 | $1.78m – less than $1.9m | $120,000 |
| $1.68m – less than $1.79m | $220,000 (2 years) | $1.66m – less than $1.78m | $240,000 (2 years) |
| Less than $1.68m | $330,000 (3 years) | Less than $1.66m | $360,000 (3 years) |
In addition to the adjusted contribution caps and thresholds outlined above, several other thresholds will also be impacted including:
The eligibility thresholds for the Superannuation Government Co-Contribution
For individuals with low or moderate incomes who make personal non-concessional (after-tax) contributions to their super fund, there’s a possibility of receiving a government co-contribution of up to $500. The amount of government co-contribution is contingent upon the individual’s income and contribution amount.
Application for the super co-contribution isn’t necessary. The Australian Taxation Office (ATO) determines eligibility during the tax return filing process. If the individual’s super fund has their tax file number (TFN), the co-contribution is automatically deposited into their super account.
It’s important to note that the preservation rules governing current super entitlements also extend to the co-contribution.
To be eligible for the super co-contribution you must:
- have made one or more personal non-concessional super contributions to your complying super fund during the financial year
- pass the two income tests (income threshold and 10% eligible income tests)
- be less than 71 years old at the end of the financial year
- not hold a temporary visa at any time during the financial year (unless you’re a New Zealand citizen or it was a prescribed visa under subsection 20AA(2)External Link of the Superannuation (Unclaimed Money and Lost Members) Act 1999
- have lodged your tax return for the relevant financial year
- have a total superannuation balance less than the general transfer balance cap at the end of 30 June of the previous financial year
- not have contributed more than your non-concessional contributions cap.
The Low-Rate Cap (which applies to the tax treatment of superannuation withdrawals)
If you reach your preservation age and withdraw super before turning 60, you pay tax on the taxable components of your payments. The low-rate cap is a limit on the amount that can be taxed at the concessional super rate of 15%.
The low-rate cap amount for the 2023–24 financial year is $235,000.
Redundancy tax-free thresholds
Any payments that meet the conditions of a genuine redundancy are tax-free up to a limit depending on your years of service with your employer. The maximum amount of a genuine redundancy payment you can receive tax-free in the 2023-24 financial year is $11,985 plus $5,994 for each completed year of service.
The Superannuation Guarantee Maximum Contribution Base
The superannuation guarantee is the official term for compulsory super contributions made by employers on behalf of their employees. The superannuation guarantee amount for 2023–24 is 11% of an employee’s ordinary time wages or salary. This rate is scheduled to increase progressively to 12% by July 2025.
The General Transfer Balance Cap
This is indexed according to movements in the Consumer Price Index (CPI), which had already been confirmed as remaining set at $1.9 Million for the 2024-25 financial year.
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