Forman Financial Services

Maximise non-concessional contributions (NCC’s)

To boost future retirement income, non-concessional contributions may be maximised each financial year, up to the member’s NCC cap.

A member’s NCC cap in 2019–20 is determined by:

•    the standard $100,000 NCC cap, and
•    total super balance (TSB) at 30 June 2019, and
•    whether the member can use the bring-forward rule (applicable for members under age 65, as explained below).
•    whether the member has previously triggered the bring forward rule and is still in an existing bring forward period.

If a member’s TSB at 30 June 2019 is $1.6 million or more, their NCC cap in 2019-20 is zero, and any non-concessional contributions made in 2019-20 will be deemed to exceed the contributions cap.

In addition, members aged 65 – 74* must have satisfied the work test or qualify for the work test exemption to make non-concessional contributions to super. Otherwise, a fund trustee must return the contribution to the member.

Bring-forward rule

Members under age 65 at any time in 2019–20 may effectively bring-forward up to two years of standard NCC cap, allowing them to contribute up to $300,000 in 2019–20 without exceeding their NCC cap.

The number of years that may be brought forward into 2019–20 is determined by the member’s total superannuation balance at 30 June 2019, as shown in the table below.

Consideration should also be given to the proposed changes for the bring-forward rule from 1 July 2020, particularly for clients turning 65 in 2019-20. See ‘Maximise NCC contributions for 65 year olds’ below for more information.

TABLE 1 – Bring forward rule for members under age 65 at any time in 2019-20

Total super balance as at previous 30 June 2019 Standard NCC cap each financial year 2019-20 NCC cap including bring-forward amount for eligible members Bring-forward period for eligible members
< $1.4 million $100,000 $300,000 3 years
$1.4 million – < $1.5 million $100,000 $200,000 2 year
$1.5 million – < $1.6 million $100,000 $100,000 Standard cap only
≥ $1.6 million n/a $0 n/a

* Personal super contributions, excluding downsizer contributions, cannot be accepted by a fund trustee once the member turns 75 (including up to 28 days after the end of the month in which they turn 75). Spouse contributions cannot be accepted once the receiving spouse reaches age 70.

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