Super contribution limits are increasing – understand the changes and how they might affect you

Industry news
16 June 2021

There are limits to the amount of money you can contribute to your super account without finding yourself with an unexpected tax bill. These are known as contribution caps and they’re increasing from 1 July this year. Meaning you might be able to invest more into super for your future.

Contribution limit changes explained

The caps for concessional (before-tax) and non-concessional (after-tax) contributions will increase by 10% for the 2021/22 financial year onwards.

  • The cap for before-tax contributions will increase from $25,000 to $27,500 p.a. These include employer compulsory superannuation guarantee (SG) payments (these are also changing), and additional voluntary contributions – including salary sacrifice – and personal contributions you make for which you claim a tax deduction.
  • The cap for after-tax contributions will increase from $100,000 to $110,000 p.a. These are contributions you put into super using after-tax dollars, for which you don’t claim a tax deduction.

This increase to the non-concessional (after-tax) contributions caps also affects the bring-forward rule. Under this rule, if eligible, you can contribute up to an amount equal to three years’ worth of after-tax contributions within a single income year. Your non-concessional cap is based on a multiple of the non-concessional cap that applies in the year you trigger the bring-forward rule. See our case study below for an example of how this might work.

You can learn more about the contributions caps and what happens if you go over the limits here.

Other super changes from 1 July

Some additional changes to super are coming on 1 July 2021, they include:

  • Employer SG payments are legislated to increase from 9.5% to 10%
  • The amount that can be transferred from a super account to a pension account, known as the transfer balance cap, will be indexed up to $1.7 million for eligible members, up from $1.6 million.^

We understand the transfer balance cap and tax rules can be complicated, that’s why we’re here to help. As a CareSuper member, you can speak with a financial planner at no extra cost for your first appointment.* You can book a call-back here.

See how the changes might affect you

To help you see how the changes to super contribution limits might affect you, we’ve created two case studies below.

It’s important to remember that these are only two examples of how you might be able to boost your super and there are several other options for making additional super contributions that might work for you. We explain more about the different types of super contributions and the eligibility requirements here.

CASE STUDY 1: Salary sacrifice

Steph, 40, works full-time and earns $80,000 per year before-tax. She would like to start using salary sacrifice to grow her super balance and potentially reduce the amount she pays in tax.

The table below shows how much she might be able to contribute to super using salary sacrifice.

  2020/21 2021/22
Employer SuperGuarantee (%) 9.5% 10%
Super Guarantee payments($) $7,600 $8,000
ConcessionalContributionscap $25,000 $27,500
Remaining cap available for salary sacrifice $17,400 $19,500

CASE STUDY 2: Using the bring-forward rule

Michael, 55, has a super balance of $600,000. He made a non-concessional contribution of $150,000 in 2019/20 after receiving an inheritance.

  2019/20 2020/21 2021/22
Non-concessional contribution caps $100,000 100,000 $110,000
Michael’s contributions $150,000  
Remainingnon-concessional contribution cap $0 $150,000
Totalnon-concessional contribution cap $300,000

Michael triggered the bring-forward rule in financial year 2019/20 when the non-concessional contribution cap was $100,000, so his non-concessional cap remains a multiple of the cap at the time and doesn’t change with the 10% increase on 1 July 2021.

If Michael had contributed his $150,000 inheritance in financial year 2020/21 instead, again his cap doesn’t change with the increase.

  2020/21 2021/22 2022/23
Non-concessional contribution caps $100,000 $110,000 $110,000
Michael’s non-concessional contributions $150,000  
Remainingnon-concessional contributions cap $0 $150,000
Total non-concessional contribution cap $300,000

If Michael contributes his $150,000 inheritance to his super account in financial year 2021/22 the new non-concessional contribution cap will apply.

  2021/22 2022/23 2023/24
Non-concessional contribution caps $110,000 $110,000 $110,000
Michael’s non-concessional contributions $150,000  
Remaining non-concessional contributions cap $0 $180,000
Total non-concessional contributions cap $330,000

Different rules apply to members who are aged over 65 and/or have a total super balance of more than $1.4 million. If you have questions about making additional super contributions, remember we’re always here to help.

Advice when you need

When it comes to making decisions about your super, you don’t have to fly solo. As a CareSuper member you can access advice over the phone – at no extra cost.#

Book a call-back with a financial planner today.

*Advice is provided by one of our financial planners who are Authorised Representatives of Industry Funds Services Limited (IFS). IFS is responsible for any advice given to you by its Authorised Representatives. Industry Fund Services Limited ABN 54 007 016 195 AFSL 232514.

^Indexation of the general transfer balance cap,,

#Financial advice obtained over the phone, or through MemberOnline, is provided by Mercer Financial Advice (Australia) Pty Ltd (MFAAPL) ABN 76 153 168 293, Australian Financial Services Licence #411766.