Four critical superannuation changes

A new financial year brings with it changes in superannuation. These changes elude to the evergrowing complexity of super contributions and the changes to concessional and non-concessional contribution caps heading into the new year.

Increase in concessional contribution caps

From 1 July 2017 to 30 June 2021, the concessional contribution cap for each year has been $25,000. From 1 July 2021, the concessional contributions cap changed to $27,500. The increase is a result of indexation in line with average weekly ordinary time earnings (AWOTE).

Your cap may be higher if you did not use the full amount of your cap in earlier years. This is called the carry-forward of unused concessional contributions. You can check your available concessional contributions cap using the ATO online services (accessed via myGov).

Increase in non-concessional contribution caps

From 1 July 2017 to 30 June 2021, the non-concessional contribution (NCC) cap for each year has been $100,000 or $300,000 over 3 years when using bring-forward arrangements. From 1 July 2021, the NCC cap is being increased to $110,000 or $330,000 over three years when using bring-forward arrangements.

An individual’s NCC cap may vary for the following reasons:

  • If a bring-forward arrangement is currently in place
  • If your total super balance is greater than, or equal to, the general transfer balance cap ($1.6 million from 2017–21; $1.7 million from 2021–22).

The introduction of the transfer balance cap (TBC) and subsequent increase in TBC has added significant complexity when it comes to an individual’s ability to make NCCs. It’s more crucial than ever to check with your Super Fund administrator before making any NCCs to ensure you don’t inadvertently exceed your cap and face excess contribution penalties.

Increase in Transfer Balance Cap

The TBC is a limit on how much superannuation can be transferred from your accumulation superannuation account to a tax-free 'retirement phase' account.

The general TBC is currently $1.6 million. From 1 July 2021, it has been indexed to $1.7 million. Now that the general TBC is indexed to $1.7 million, there won't be a single cap that applies to all individuals. Every individual will have their own personal TBC of between $1.6 and $1.7 million, depending on their circumstances.

If you start a retirement phase income stream for the first time on or after 1 July 2021, you will have a personal TBC of $1.7 million. If you had a transfer balance account before 1 July 2021, your personal TBC will be:

  • $1.6 million if, at any time between 1 July 2017 and 30 June 2021, the balance of that account was $1.6 million or more
  • Between $1.6 and $1.7 million in all other cases, based on the highest ever balance of your transfer balance account.

You can view your transfer balance information using the ATO online services (accessed via myGov).

Increase in Super Guarantee Rate

As an employee, if you meet the Australian Government’s eligibility criteria, you are entitled to receive regular superannuation contributions, made on your behalf by your employer.

The minimum percentage employers are required to pay is set to increase over time, with the next increase to 10% due on 1 July 2021. Below are the present SG rates, as well as the currently legislated future changes to the rate from the Australian Government.

Financial Year

Super Guarantee Rate

1 July 2014 – 30 June 2021


1 July 2021 – 30 June 2022


1 July 2022 – 30 June 2023


1 July 2023 – 30 June 2024


1 July 2024 – 30 June 2025


1 July 2025 – 30 June 2026 and onwards


If you have some questions about what this means for you, get in touch with your local PKF, SMSF team.

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