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Changes to Super Contribution Caps
Nathan Lear
Partner & Wealth Adviser
14 Mar 2024
There have been some exciting changes to the annual superannuation contribution caps.
Recently announced, superannuation contribution caps will rise for the first time in three years after the Australian Bureau of Statistics reported an increase in average weekly ordinary time earnings (AWOTE).
From financial year 2024/2025 there will be an increase in the concessional contribution cap. This annual cap, which includes employer contributions and salary sacrifice contributions, has been raised from $27,500 to $30,000. This increase now allows individuals to contribute even more towards their superannuation in a tax-effective manner. Individuals also need to keep in mind the rate of superannuation guarantee (SG) will also increase to 11.5 per cent from 1 July 2024.
Additionally, the annual non-concessional contribution cap has also been adjusted. From financial year 2024/2025, individuals can now contribute up to $120,000 per year as a non-concessional contribution, or up to $360,000 under the bring-forward rule. This change provides individuals with the opportunity to boost their superannuation savings through after-tax contributions.
With these new changes announced, does this mean the Total Superannuation Balance (TSB) and Transfer Balance Cap (TBC) thresholds also increase?
Not quite.
Unlike contribution caps (that are based on AWOTE), and SG rate (that is legislated), the TSB threshold and TBC are dependent on the cost of living, as measured by the Consumer Price Index (CPI). Given the easing of inflation, the TSB will remain at $1.9 million during the 2024-25 financial year. In addition, the TBC will also remain unchanged at $1.9 million.
The following tables indicate the change and how much can be contributed to super as Non-Concessional Contributions (NCC) depending on your Total Super Balance (TSB):
To 30 June 2024 (previous)
| Total Super Balance (TSB) at Previous 30 June | Max NCC |
| Less than $1.68m | $330,000 |
| $1.68m to under $1.79m | $220,000 |
| $1.79m to under $1.9m | $110,000 |
| $1.9m and over | $0 |
From 1 July 2024 (new)
| Total Super Balance (TSB) at Previous 30 June | Max NCC |
| Less than $1.66m | $360,000 |
| $1.66m to under $1.78m | $240,000 |
| $1.78m to under $1.9m | $120,000 |
| $1.9m and over | $0 |
It is important to be aware of these changes, as they can have a significant impact on individuals retirement savings. By staying informed and seeking appropriate advice from the right professionals, you can make informed decisions that could benefit your financial future.
Remember, planning for retirement is a long-term endeavour, and specifically taking advantage of the increased contribution caps could help you build a solid foundation for your retirement savings.
If you want to optimise your financial situation, consider talking to one of Hewison Private Wealth’s many experienced Financial Advisers today. Contact us HERE.