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Good news for retirement savings! The annual cap for concessional (pre-tax) super contributions is increasing to $30,000. In this article, we discuss how contributions to SASS count towards the concessional cap and how you can maximise your tax-effective contributions to boost the money you have for retirement.

The information in this article is applicable for members who are full-time employees. Different conditions apply to part-time employees and members on leave without pay. These members should contact State Super Customer Service for further details. 

Calculating your concessional contributions to SASS

Within SASS, your before-tax personal contributions, plus an amount to represent the notional amount of employer contribution, are combined and counted towards the cap.

To calculate your concessional contributions to SASS (including your SANCS), simply insert your total benefit factor from the right-hand column of the table below into the following formula.

Different calculations are also required for former members of the State Public Service Superannuation Fund (SPSSF) and the NSW Retirement Fund (NRF), as shown in the following tables.

Former members of SPSSF will have a seven-digit membership number commencing with 15.

Most former members of NRF will have a seven-digit membership number commencing with 50.

Calculating your concessional contributions

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Superable salary
x Total benefit factor
+ Salary sacrifice contributions to SASS
= Total concessional contributions

 

1 July 2022 - 30 June 2023

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Standard SASS members' contribution rate benefit category SASS benefit factor SANCS benefit factor Total benefit factor to use in formula calculation
3% or less 4.8% 1.2% 6.0%
4% 6.0% 1.2% 7.2%
5% 7.2% 1.2% 8.4%
6% or more 8.4% 1.2% 9.6%

1 July 2022 - 30 June 2023

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Standard SPSSF members' contribution rate benefit category SASS benefit factor SANCS benefit factor Total benefit factor to use in formula calculation
2% or less 4.8% 1.2% 6.0%
3% 6.0% 1.2% 7.2%
4% 7.2% 1.2% 8.4%
5% 8.4% 1.2% 9.6%
6% or more 10.8% 1.2% 12.0%

1 July 2022 - 30 June 2023

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Standard NRF members' contribution rate benefit category SASS benefit factor SANCS benefit factor Total benefit factor to use in formula calculation
3% or less 4.8% 1.2% 6.0%
4% 6.0% 1.2% 7.2%
5% 7.2% 1.2% 8.4%
6% or more 8.4% 1.2% 9.6%

 

Been a SASS member for 30 years or more?

Your total benefit factor is 1.2% if:

  • you have 30 or more years SASS membership, and
  • have accrued the maximum of 180 points at the start of the financial year.
     

What if it happens during the financial year?

An apportionment is required if you reach 30 or more years SASS membership and 180 benefit points during the year.

Once you reach 30 years in the scheme and the maximum 180 points, your notional SASS benefit factor drops to zero so that only the SANCS benefit factor is counted towards the notional employer contribution. This will often provide more room within the cap to make additional contributions to super.

For members of SASS and former members of NRF, it’s important to note that if you have 30 or more years membership and have accrued the maximum of 180 points at the start of the financial year, your total benefit factor to use in the calculation reduces to 1.2% if you reach 30 or more years SASS membership during the financial year an apportionment is required.

For former members of SPSSF that are aged less than 55 and had reached 162 benefit points at the start of the financial year your benefit factor is only 1.2% until you reach age 55, when it will begin to accrue at the higher rate in the table above until you reach 180 benefit points. An apportionment may also be made where a member is aged between 55 and 58 and has benefit points between 162 and 180.

Special cap protection

A special condition applying to SASS members means that concessional contributions to SASS are always deemed to be within the cap unless they lose this special condition. In fact, SASS will report only the amount up to the cap to the ATO. Members lose this special condition permanently if they move to a higher benefit category than the category they were in on either 12 May 2009 or 5 September 2006.

These are dates when the Australian Government announced changes to the law regarding concessional contributions. Members of defined benefit funds are protected from any adverse consequences from these changes provided they have not moved to a higher benefit category than the category they were in on either of those dates.

Electing to salary sacrifice your compulsory personal contributions to SASS does not mean that you lose this special condition if you have not already lost the protection of the cap.

Despite the special conditions applying to SASS, you can still exceed the cap if additional employer contributions (including salary sacrifice contributions) are made to another fund in addition to SASS.

Contribution cap protection

To find out if you are eligible for contribution cap protection, call State Super Customer Service on 1300 130 095 or check under your most recent statement under ‘your membership details – Contribution cap protection’.

Carry forward concessional contributions

If you have a total superannuation balance of less than $500,000 at the end of 30 June of the previous financial year, you may be entitled to contribute more than the general concessional contributions cap using the carried forward amounts of your unused concessional contributions.

Carry-forward contributions are not a special type of super contribution; they simply allow super fund members to use some or all of their previously unused concessional contributions cap (or limit) on a rolling basis for five years. For example, the 2023-24 financial year will be the last financial year in which unused concessional contributions caps from the 2018-19 financial year can be used.

How do I check my carry-forward concessional contributions?

  1. Once you’re logged in to the ATO website via MyGov, select the ‘Super’ menu.
  2. Then select 'information' menu item, then select ‘carry-forward concessional contributions’.
  3. On this page, you’ll find: your unused concessional contributions available to carry forward which includes the current years cap confirmation on whether you are eligible based on your Total Super Balance. 

 

A tax effective way to boost your retirement savings

Making extra contributions is one of the best ways to increase your super savings. Concessional super contributions, which include compulsory super payments from employers, pre-tax salary sacrifice and voluntary contributions that members then claim as a tax deduction, are taxed at only 15%1 – significantly less than the marginal tax rates most Australians pay.

As a SASS member, you can make contributions of between 1 and 9% of your superable salary to the scheme each year. However, if you want to make additional before-tax (salary sacrifice or tax deductible) contributions into super above the maximum 9%, you’ll need to open an account with another super fund. Importantly, if you’re making contributions to a second super fund (in addition to SASS) you will need to make sure you stay within the annual contributions cap set by the government.

1 If you're a high income earner you may be liable for an additional 15% tax on your concessional contributions called Division 293 tax. For more information refer to SASS Fact Sheet 3 - Taxation. If this tax applies, your contributions are effectively taxed at 30% which is less than the top marginal tax rate. If this tax applies, your contributions are effectively taxed at 30% which is less than the top marginal tax rate.

To find out more about the rates that applied in previous years, contact the State Super Customer Service on 1300 130 095. For more information refer to SASS Factsheet 16 Contribution Caps and Your Total Superannuation Balance.

Tax time tips to help maximise your money

There is other great news with tax cuts coming 1 July. The new financial year will bring extra money to our weekly pay packet for many of us. It’s the perfect time for some super helpful updates from our financial advice expert Iby Ibrahim.

Watch now

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Where to next?

The money habits that can help now and in retirement

What should you do with an inheritance?

New retirement expenses

Back to SASS edition 16

Disclaimer

General advice only. Consider your objectives, financial situation or needs, which have not been accounted for in this information and read the relevant PDS and TMD before deciding to acquire, or continue to hold, any financial product. Advice provided by Aware Financial Services Australia Limited (ABN 86 003 742 756, AFSL 238430), wholly owned by Aware Super. You should read the Financial Services Guide, before deciding about our financial planning services. Issued by Aware Super Pty Ltd (ABN 11 118 202 672, AFSL 293340), trustee of Aware Super (ABN 53 226 460 365).