Concessional contribution cap indexation
The concessional contribution cap (originally set at $25,000 from 1 July 2017) is indexed by Average Weekly Ordinary Time Earnings (AWOTE), in increments of $2,500 (rounded down). With the announcement of the AWOTE figure for the December 2020 quarter, the concessional contribution cap is set to increase from $25,000 pa to $27,500 pa from 1 July 2021.
Non-concessional contribution cap increase
The standard non-concessional contribution cap is calculated as four times the concessional contribution cap. Therefore, due to the increase in the concessional contribution cap from $25,000 to $27,500, the standard non-concessional contribution cap is also set to increase from $100,000 to $110,000 from 1 July 2021. In addition, the maximum amount a member who was under 65 at the start of the year can contribute under the non-concessional contribution cap bring-forward rule is also set to increase from $300,000 to $330,000 from 1 July 2021.
Pension Transfer Balance Caps
The general transfer balance cap is currently $1.6 million. From 1 July 2021, it will be indexed to $1.7 million.
When the general transfer balance cap is indexed to $1.7 million, there won't be a single cap that applies to all individuals. Every individual will have their own personal transfer balance cap of between $1.6 and $1.7 million, depending on their circumstances.
If you start a retirement phase income stream for the first time on or after 1 July 2021, you will have a personal transfer balance cap of $1.7 million.
If you had a transfer balance account before 1 July 2021, your personal transfer balance cap will be:
$1.6 million if, at any time between 1 July 2017 and 30 June 2021, the balance of that account was $1.6 million or more.
If your account was below $1.6 million your new cap is based on a proportional calculation and will be somewhere between $1.6 and $1.7 million.
Catch Up Super Contributions.
2019-20 was the first financial year that members may be able to increase their basic $25,000 concessional contributions cap by using catch-up concessional contributions.
Eligible members may increase their basic concessional contributions cap in a financial year, with any unused concessional contributions cap that accrued in the previous five financial years (note, unused concessional cap amounts can only be carried forward from 2018-19 onwards). This use of carry forward unused concessional contributions cap amounts is also known as catch-up concessional contributions.
To be eligible to use accrued unused concessional contributions cap amounts, the member must have a total super balance of less than $500,000 on the 30 June immediately prior to the financial year of the concessional contribution.