The maximum amount we can contribute into superannuation is decided by the superannuation contribution ‘caps’. Super contribution caps change every few years, and it is important to know what the changes are.
Why are there contribution caps?
The government limits how much money we can add to superannuation via super contribution caps. They do this because our superannuation system is so good don’t want us to have all our money invested in such a tax friendly environment. As can be seen in the table below, governments have been all over the place in how they determine super contribution caps. But what remains consistent is that superannuation is a great place to have your money; especially during retirement.
The concessional contribution cap is indexed to the Average Weekly Ordinary Time Earnings (AWOTE), but it only increases in increments of $2,500. This is to stop the rule changing every six months or so. Under the current rules, the non-concessional cap is set at four times the concessional contributions cap (it used to be six times). As the concessional contributions will be lifted by $2,500, the non-concessional contributions will be lifted by $10,000.
It should be viewed as good news whenever the concessional and non-concessional caps are lifted.
There are two main reasons why these increases are so welcome. The first is that you can now increase salary sacrifice and save even more tax. The second reason, is that the non-concessional cap will benefit people approaching retirement who often struggle to get their assets into the super environment. It is common for me to recommend the ‘bring-forward’ rule which allows person to effectively contribute 3 years’ worth of contributions in the one year. As of 1 July 2024, instead of a maximum $330,000 contribution, people will now be able to contribute $360,000; a sizeable difference.
Current and historic concessional and non-concessional caps figures
| Financial year/s | Your age | Concessional contribution cap | Non-concessional contribution cap |
| 2025 – | All ages | $30,000 | $120,000 |
| 2021– 2024 | All ages | $27,500 | $110,000 |
| 2017–2021 | All ages | $25,000 | $100,000 |
| 2014–2017 | <49 | $30,000 | $180,000 |
| 2014–2017 | 49+ | $35,000 | $180,000 |
| 2013–14 | <59 | $25,000 | $150,000 |
| 2013–14 | 59+ | $35,000 | $150,000 |
| 2012–13 | All ages | $25,000 | $150,000 |
| 2009–2012 | <50 | $25,000 | $150,000 |
| 2009–2012 | +50 | $50,000 | $150,000 |
| 2007–2009 | <50 | $50,000 | $150,000 |
| 2007–2009 | +50 | $100,000 | $150,000 |
Transfer Balance Cap and Total Superannuation Balance changes
Other good news is that in addition to super contribution cap increases, there are regular increases to the Transfer Balance Cap. Essentially this is amount of your superannuation you can have in pension phase. From 1 July 2025, the Transfer Balance Cap will be at $2,000,000.
| Financial year/s | Amount |
| 2026- | $2,000,000 |
| 2023-2025 | $1,900,000 |
| 2021-2023 | $1,700,000 |
| 2017-2021 | $1,600,000 |
Officially you can have more than these limits due to growth, but the pension must commence with a figure at or under the cap.
This is turn lifts the ‘Total Superannuation Balance’. Your total superannuation balance is usually your combined super balances, and if this exceeds the transfer balance cap then you are unable to make any non-concessional contributions. These changes now mean that people can contribute an extra $200,000 into superannuation, and then pension phase, which they otherwise couldn’t.
Being aware of the contribution caps, and various strategies to get more funds into superannuation prior to retirement, is of tremendous importance for good retirement planning.
If you would like to discuss your retirement planning, please feel free to get in touch with the independent retirement advisers at Cornish Wealth Management.
