Now is a good time to make use of your carry-forward super contributions. If you have unused concessional (deductible) superannuation contributions from the 2019/20 financial year, the 2024/25 financial year may be your final opportunity to make use of them. By making a lump sum deductible contribution before 30 June 2025, you can take advantage of these unused amounts. You’re able to carry forward unused concessional contributions from the past five years—meaning any unused contributions from 2019/20 will expire on 30 June 2025.
Here’s what you need to know—and how to make the most of this opportunity to boost your retirement savings.
What are Carry-Forward Super Contributions?
Each year, Australians can make concessional (before-tax) contributions to their superannuation, including:
- Employer Super Guarantee (SG) contributions
- Salary sacrifice contributions
- Personal deductible contributions
These count toward the annual concessional contributions cap, currently set at $30,000 for 2024/25.
If you didn’t use up the full cap in previous years, you may be eligible to carry forward the unused amounts for up to five years, allowing you to “catch up” in later years.
Who can Use Catch-Up Contributions?
To be eligible to use your unused concessional cap amounts:
- If you’re aged 67 or over, you must meet the work test or work test exemption to make personal deductible contributions.
- Your total superannuation balance (TSB) must be under $500,000 on 30 June of the previous financial year.
Visit the ATO website for the full eligibility criteria and conditions.
Why 2024/25 Matters
The ability to carry forward unused concessional cap amounts started from 1 July 2018. This means carry-forward amounts from 2019/20 will expire on 30 June 2025 if not used. Don’t let this valuable opportunity go to waste!
Case Study
Peter has received $10,000 in employer super contributions each year for the past five years and hasn’t made any additional personal contributions. As a result, he has accumulated unused cap space of $82,500 under the carry-forward rules.
In the 2024/25 financial year, Peter can choose to make a large concessional contribution to his super and claim a personal tax deduction, using all or part of the $82,500 cap as well as any unused cap in the 2024/25 financial year. The following table outlines the details:
Strategies to Maximise Your Super Contributions
1. Work Test Exemption
If you’re 67 or older and recently retired, you may still be eligible to contribute using the work test exemption. This allows for deductible contributions even after ceasing employment.
2. Spouse Contribution Splitting
You can split concessional contributions (including catch-up amounts) with your spouse, which may help manage Transfer Balance Caps, access super earlier, or improve Age Pension entitlements.
3. Smart Timing of Contributions
The timing of your catch-up contributions can affect your tax position and overall strategy. A financial adviser can help you determine when and how much to contribute, based on your goals and financial situation.
4. Double Deductions (for SMSFs)
SMSF members can sometimes contribute in one year, claim a deduction that year, and have the contribution counted toward the following year’s cap. Note: Contributions must be allocated to your SMSF account within 28 days after the end of the month in which they are made.
In conclusion, catch-up deductible contributions offer a strategic tool for optimising superannuation savings. As the 2024/25 financial year represents the final opportunity for unused carry-forward contributions from 2019/20, individuals are encouraged to explore this avenue and consult with financial advisors for personalised guidance.
If you’d like tailored advice on how to take advantage of your carry-forward contributions, speak with Scott Martin, Financial Adviser and Director at LZR Advisory.
