October 2019

he standard concessional contributions (CC) cap is $25,000 in the 2019/20 financial year. Read more about contribution caps.


Contribution caps

Concessional contributions cap

The standard concessional contributions (CC) cap is $25,000 in the 2019/20 financial year. The cap is indexed annually in line with Average Weekly Ordinary Times Earnings (AWOTE) and rounded down to the nearest $2,500.


Carry-forward unused CC cap

Starting from 1 July 2018, individuals who do not fully utilise their CC cap may be able to carry forward the unused portion for use in a later financial year.

From 1 July 2019, the unused portion can be applied to increase the individual’s CC cap where:

  • their actual CCs exceed the standard CC cap
  • their total superannuation balance (TSB) (discussed below) is less than $500,000 at 30 June of the prior financial year, and
  • they have unused CC cap available from any or all of the prior five financial years (occurring from 2018/19 onwards)

Example 1: Applying unused CC cap
Laura’s total CCs in 2018/19 were $10,000, leaving her with an unused CC cap of $15,000.
In 2019/20 Laura has surplus income and increases her total CCs to $35,000. This exceeds the standard CC cap by $10,000.
If Laura’s total superannuation balance at 30 June 2019 is less than $500,000, $10,000 of her unused CC cap from 2018/19 will be applied to increase her CC cap to $35,000 in 2019/20.
Laura’s remaining unused CC cap from 2018/19 of $5,000 may be carried forward until 30 June 2024.

Non-concessional contributions cap

The non-concessional contributions (NCC) cap is defined as four times the standard CC cap, or $100,000 per year (in 2019/20). However, where an individual’s total superannuation balance exceeds $1.6 million at 30 June of the financial year (ie 30 June 2019), their NCC cap is nil.

Those under age 65 at any time in a financial year may be eligible to bring-forward future years’ NCC cap entitlements. The amount that can be contributed under the bring-forward arrangements depends on the individual’s total superannuation balance as at 30 June of the prior financial year.

Where an individual’s TSB at the prior 30 June is:

  • less than $1.4 million, total NCCs in the three-year period are capped at $300,000 (three times annual cap)
  • $1.4 million to less than $1.5 million, total NCCs in the two-year period are capped at $200,000
  • $1.5 million to less than $1.6 million, bring-forward is not available and total NCCs are limited to the annual cap of $100,000.

The ‘bring-forward’ cap will trigger automatically in the first financial year that NCCs of more than the annual cap.

To use their remaining bring-forward NCC cap in a subsequent financial year, an individual’s total superannuation balance must be less than $1.6 million at the prior 30 June, otherwise their remaining NCC cap is nil for that year.

When the ‘bring-forward’ arrangements have been triggered, the cap is fixed and will not increase with indexation during the bring-forward period.


Example 2: ‘Bring-forward’ arrangements
Sam has unexpectedly inherited $300,000 that he would like to contribute to his SMSF. If Sam turns 65 on 20 July 2019, can he contribute the full amount to superannuation? Sam’s total superannuation balance as at 30 June 2019 was $900,000.
As Sam is under age 65 during the 2019/20 financial year and his total superannuation balance is less than $1.4 million, he is eligible to use the bring-forward provisions. Assuming Sam hasn’t used the ‘bring-forward’ provisions in either of the two previous financial years, he can make up to $300,000 of NCCs over the current and future two years without exceeding the NCC cap, providing he has met the work test (discussed below).

The Government has proposed to extend eligibility to the bring-forward rule to those aged 65 and 66 from 1 July 2020. Not yet law at the time of writing.


Downsizer contribution cap

Individual’s aged 65 or more may be able to use the capital proceeds from the sale of their main residence to make a ‘downsizer’ contribution to superannuation.

The ‘downsizer’ contribution cap is $300,000 in 2019/20. However, the actual amount that can be contributed is limited to the lesser of

  • $300,000, less any downsizer contributions already made by the individual, and
  • the actual capital proceeds from the sale of the property, less any downsizer contributions already made by the individual or their spouse

Downsizer contributions do not count towards the NCC cap. The work test does not apply to these contributions.


Example 3: ‘Downsizer’ arrangements
Peter has owned his main residence for 10 years and is looking to move to a smaller property. He enters into a contract to sell his home for $800,000, with settlement occurring on 1 November 2019.
He turns 65 on 5 December 2019 and would like to use some of the sale proceeds to increase his superannuation.
If he uses part of the sale proceeds to make a personal contribution before 5 December 2019, it will be treated as an NCC. The amount he can contribute will depend on his available NCC cap capacity. However, if he makes the contribution on or after his 65th birthday, he can choose to have it treated as a ‘downsizer’ contribution.
Peter can contribute up to $300,000 under the ‘downsizer’ provisions, provided the contribution is made within 90 days of settlement.

Work test

There are generally no restrictions on individuals under age 65 making contributions to superannuation. However, individuals aged 65 or more not only need to consider contribution caps, but also whether they are eligible to contribute to superannuation.

Once an individual turns 65 (and is under age 75), a superannuation fund can generally only accept personal contributions and non-mandated employer contributions where the work test has been met.

The work test requires  an individual to be gainfully employed for at least 40 hours in 30 consecutive days in the financial year. This test must be met prior to the contribution being made.

From 1 July 2019, those aged 65 to 74 may be exempt from the work test for 12 months from the end of the financial year in which they last met the work test. The exemption applies if the individual:

  • was gainfully employed for at least 40 hours in 30 consecutive days during the financial year ending before the contribution was made
  • has a total superannuation balance of less than $300,000 at 30 June of the financial year ending before the contribution was made, and
  • has not previously used this work test exemption

Example 4: Work test
Sam retires from the workforce on 28 June 2020, having worked full time for the whole of 2019/20. He turns 65 on 20 July 2020.
If Sam’s total superannuation balance is less than $300,000 at 30 June 2020, he will not need to meet the work test to make personal contributions in 2020/21, even if the contribution is made after his 65th birthday.
However, if his total superannuation balance is more than $300,000 and he makes personal contributions on or after his 65th birthday, he must meet the work test in the financial year the contribution is made before the fund can accept the contribution

The Government has proposed to remove the work test requirement for those age 65 and 66 from 1 July 2020. Not yet law at the time of writing.

Requirement for super funds to return contributions

As mentioned above, there are minimum requirements for accepting contributions. If a contribution is received in a manner that is inconsistent with these requirements, the trustee of the fund has 30 days from when it first became aware of the inconsistency to return the contribution.


Example 5: Returning contributions
Sam’s super fund is not able to accept personal contributions after 20 July 2019, unless he has met the work test. Any personal contributions received from Sam after this date without the work test being met need to be returned by the fund within 30 days of the contribution being made.

Requirement for super funds to return contributions

As mentioned above, there are minimum requirements for accepting contributions. If a contribution is received in a manner that is inconsistent with these requirements, the trustee of the fund has 30 days from when it first became aware of the inconsistency to return the contribution.


Example 4: Returning contributions
Sam’s super fund is not able to accept personal contributions after 20 July 2016, unless he has met the work test. Any personal contributions received from Sam after this date without the work test being met need to be returned by the fund within 30 days of the contribution being made.

Total superannuation balance

As noted above, total superannuation balance is used to determine eligibility for a range of superannuation-related measures. This includes access to the NCC cap and bring-forward provisions, the carry-forward of unused CC cap and the work test exemption. 

An individual’s total superannuation balance is the sum of:

  • their accumulation phase interests, including transition to retirement pensions
  • their transfer balance account (excluding credits and debits relating to account based pension, market linked pension, transition to retirement pensions in retirement phase and personal injury contributions)
  • the current value of their account based pensions, market linked pensions and transition to retirement pensions in retirement phase
  • rollovers in transit between funds
  • the proportion of outstanding limited recourse borrowing arrangement loans that are attributed to the individual in certain circumstances
  • less personal injury contributions

Further information

Macquarie Contribution Cap Companion

Macquarie FastFact Super contribution acceptance rules

Related products

Additional information

Macquarie Investment Management Limited (MIML) ABN 66 002 867 003 AFSL 237 492 is not an authorised deposit-taking institution for the purposes of the Banking Act (Cth) 1959, and MIML’s obligations do not represent deposits or other liabilities of Macquarie Bank Limited ABN 46 008 583 542.  Macquarie Bank Limited does not guarantee or otherwise provide assurance in respect of the obligations of MIML.

This information is provided for the use of financial services professionals only.  In no circumstances is it to be used by a potential investor or client for the purposes of making a decision about a financial product or class of products.

The information provided is not personal advice. It does not take into account the investment objectives, financial situation or needs of any particular investor and should not be relied upon as advice.  Any examples are illustrations only and any similarities to any readers’ circumstances are purely coincidental. 

While the information provided here is given in good faith and is believed to be accurate and reliable as at September 2019, it is provided by MIML for information only.  We will not be liable for any losses arising from reliance on this information.

MIML and Macquarie Bank Limited do not give, nor purport to give, any taxation advice. The application of taxation laws to each client depends on that client’s individual circumstances.  Accordingly, clients should seek independent professional advice on taxation implications before making any decisions about a financial product or class of products.

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