Skip to main content

In this update:

  • A proposed change to the super Transfer Balance Cap 
  • Expiring carry forward concessional contribution caps 
  • The Government’s new legislation for super on Paid Parental Leave

Carry Forward and Bring Forward. Similar names, different rules. 

Unless you’re a financial adviser working with the super and tax rules every day, it’s easy to misinterpret what we mean by ‘Carry Forward’ and ‘Bring Forward’ rules that apply to super contributions. Here’s a handy reference of what’s what.  

 

Scroll table horizontally on mobile

  When it applies How it applies Benefits
Carry Forward

Contributions made from before-tax pay, known as concessional contributions.

Includes employer contributions and salary sacrifice.

The cap can vary from year to year. The 2024 cap is $30,000.

You can use remaining and unused contribution caps from the five years before this financial year. 

The combined maximum contribution limit applies. The 2023-24 combined maximum is $162,500.

Carry Forward provisions only apply to total super balances less than $500,000.

Investment earnings are taxed at 15% instead of the marginal tax rate of up to 45%, depending on taxable income, which includes interest earned from savings outside of super.

Withdrawals from super are tax free after age 60 (some exceptions apply). 

Bring Forward

Contributions made from after-tax pay or savings, known as non-concessional contributions.

Super investment earnings are taxed at 15% and the annual contribution cap is $120,000.

You can use the next two year’s after-tax contribution caps, so ‘bring forward’ those caps and use them in the current financial year. It  allows you to contribute up to $360,000 in one financial year. Investment earnings are taxed at 15% instead of the marginal tax rate of up to 45%, depending on your taxable income, which includes interest earned from savings outside of super. 

Use it or lose it. Carry Forward concessional contribution caps are expiring soon.

If your total super balance was less than $500,000 last 30 June, you have until the end of this current financial year to carry forward any unused concessional contributions caps from the 2020 financial year. 

 

Scroll table horizontally on mobile

FY2020 (2019/20) FY2021 (2020/21) FY2022 (2021/22) FY2023 (2022/23) FY2024 (2023/24) FY2025 (2024/25) Combined total 2024/25
$25,000 $25,000 $27,500 $27,500 $27,500 $30,000 = $162,500

You must exceed this current financial year’s cap, and then unused caps from the earliest possible year are applied next, and so on, with last financial year’s cap applied last to reach the maximum limit. 

This could work in your favour if you haven’t made a concessional contribution since FY2019 (2018-19) and have an asset to sell such as an investment property with a large unrealised capital gain. The opportunity is to sell before 30 June 2025 and claim a tax deduction of $162,500 as a concessional contribution to your super. 

If you are aged 67 or over at the time of making the contribution, you’ll need to meet the work test (working 40 hours in 30 consecutive days) to claim the contribution as a tax deduction.

Indexation of the Transfer Balance Cap 

The Transfer Balance Cap (TBC) is the limit on how much super can be held in tax-free retirement savings accounts, and it's indexed to the Consumer Price Index (CPI). 

The unofficial September quarter CPI data shows that the Transfer Balance Cap is tracking to be indexed to at least $2 million on 1 July 2025. 

This means that people opening their first retirement pension account after 1 July, will be able to transfer a higher than previous amount into that account. Payments and withdrawals, as well investment earnings from super based retirement income accounts are tax-free. 

TBC indexation has flow on effects for bring-forward thresholds on non-concessional contribution caps. On the other hand, concessional contributions caps are indexed in line with average wages (not CPI), and at this stage are unlikely to change. 

The indexation is not officially confirmed just yet, formal data is expected to be released 29 January 2025. It’s a good idea to speak with your financial planner about opportunities this could present for you. 

true

Contributions for Paid Parental Leave to come into effect

Good news for you, or your loved ones, planning a family. Currently the Government pays working parents up to 18 weeks' pay for parental leave (at national minimum wage). Under new laws that come into effect from 1 July 2025, super will be included as part of that paid parental leave. 

Paid as a lump sum at the end of the financial year, the contribution will be counted towards the parent’s super concessional contribution (before-tax) cap for the year. The super will be calculated on the Super Guarantee (SG) rate, which will increase from 11.5% to 12% on July 2025. 

Take advantage of these changes

If you haven’t booked in your next review appointment, call us on 1300 650 873.

This is general information only and does not take into account your specific objectives, financial situation or needs. Seek professional financial advice, consider your own circumstances and read our Financial Services Guide, any relevant product disclosure statement & Target Market Determination, before making a decision. Call us or visit our website for a copy.

Issued by Aware Financial Services Australia Limited (ABN 86 003 742 756, AFSL No. 238430), wholly owned by Aware Super (ABN 53 226 460 365) whose trustee is Aware Super Pty Ltd (ABN 11 118 202 672, AFSL 293340). For customer service please call 1800 620 305. Financial planning services are provided by Aware Financial Services Australia Limited, ABN 86 003 742 756, AFSL No. 238430. Estate planning services are provided by Aware Super Legal Pty Ltd (ACN 606 835 170), an Incorporated Legal Practice.