Super - Carry Forward Concessional Contributions

Kaz0551 on 09/06/2023 - 21:22

This is just a PSA of some info I found out recently. Every year you could contribute $25,000 in super contributions this was made up from your salary plus personal contributions or salary sacrifice.

This recently increased to $27,500.

If you didn't contribute the total amount allowed it banks up for upto 5 years. The first banked up period ends this financial year. Use it or lose it.

You can check the carry forward balances here:

https://onlineservices.ato.gov.au/Individual/SuperAccounts#C…

So how does it work?
1. You make a post tax super contribution up to the carry forward balance.
2. You fill in a form on your super web page stating you're going to claim it as a tax deduction.
The super company will in turn tax you 15%
3. You then claim the super contribution as a tax deduction, getting your 32 37 45% tax return.
4. Profit

If you're expecting a pay rise in the next 12 months maybe only cover your fifth previous year carry forward so you can get a better tax return next year.

This is not financial advice your personal circumstances may vary yada yada yada

Financial Superannuation

Comments

  • TheMindsetTraveller on 09/06/2023 - 21:49
    +1

    For super balances under $500k though.

    Great use if you can - my wife for the last 2 financial years has sent 100% of her pre-tax wages to super once her YTD income goes over $48k where you hit the 32% bracket. This is where you automatically are better 17% off instantly, though the risk is needing to preserve the funds till an older age.

  • Catsfan070911 on 09/06/2023 - 22:40

    Yeah this is a great option if you have the liquidity for it. Love it. Have used this over the last few years. Just make your contribution before the end of the tax year you wish to do this for and find the appropriate form "Claiming a tax deduction for personal contributions" or similar from your Super Fund and away you go. I essentially stopped putting money in to the ETF of my choice and started putting that in to Super instead. You could theoretically pick and choose what you are investing in via your Super Fund anyway (as risky or stable as you like).

  • Benoffie on 10/06/2023 - 08:20

    Most people who are in the position utilise this in their final years prior to retirement. It's a handy way of playing catch up with Super.

  • Ghost47 on 10/06/2023 - 11:26
    -3

    Welcome to the woke world, where you are educated far past the point of your peers.

    And I’ve been downvoted, likely by a person who wants to keep the poor, poor.

    • AngoraFish on 10/06/2023 - 13:09
      +1

      It wasn't me who down voted you, however randomly dropping the word 'woke' into a discussion about superannuation is fair cause in my opinion.

      • Ghost47 on 10/06/2023 - 14:30
        -2

        woke
        verb
        past of wake1.

        wake1
        verb
        become alert to or aware of.

        Words can have more than one meaning, sunshine.

        You can interpret the word the way you want to (i.e. the highly politicised way), for me, being woke is being aware and constantly learning so that you can develop your knowledge about the world in general and in some situations using that knowledge to your advantage, just like what the OP is doing. It's not about — I don't know — gender reassignment or pronouns or whatever you're talking about.

        • AngoraFish on 10/06/2023 - 14:55

          Speak in gibberish if you like, I won't judge, but if you chose to use 'highly politicized' language in a way that is inconsistent with the most commonly accepted interpretation don't act hurt or surprised if people have NFI what you're talking about.

          • Ghost47 on 10/06/2023 - 14:57
            -1

            @AngoraFish: Ok, thanks for the information.

          • CrowReally on 13/06/2023 - 16:28
            +1

            @AngoraFish: Spot on. "I'm playfully using an ambiguous term instead of one of several regular normal ones, I hope I don't stir up any rEsPONseS"

  • Kongzi on 10/06/2023 - 11:34

    Think you got next year too to backdate the last 5.

    • flagger on 10/06/2023 - 17:20

      Is this correct? The first FY to use a carry forward was FY18, so I think you are right.

    • flagger on 12/06/2023 - 08:36

      I called the ATO, and they confirmed the the first year that the carry forward concession contributions can be used is FY18/19 and that the last chance to use it is the FY23/24 year.

      Edit: apparently claiming previous years started in FY19/20.

      From 2019–20, carry forward rules allow you to make extra concessional contributions – above the general concessional contributions cap – without having to pay extra tax.

  • Daniel Plainview on 10/06/2023 - 16:06

    @Kaz0551

    As someone who tries to post things that assist others (and you generally just get complaints) I want to take a moment to sincerely thank you for posting this.

    Prompted me to check for my wife's account and looks like despite making salary sacrifices she still had a bit of cap left so will be a good saving.

    Much thanks for helping others, it's appreciated. :-)

  • humilem servum tuum on 10/06/2023 - 16:46

    Could always spread your donations if they are a significant amount and/or you could utilise it better in future years:

    https://www.ato.gov.au/Forms/Election-to-spread-gift-deducti…

  • Karaxela on 11/06/2023 - 10:01

    Also just to state the obvious for anyone not familiar, once someone makes any contribution into their super, including personal contributions, they'll then need to meet a condition of release to access this amount (e.g. retirement, reach perservation age etc)..

    That personal contribution may be locked in for the long long term for some. Therefore its important to point out that this strategy may not be apprropriate for everyone depending on individual circumstances,needs and financial objectives. Obviously for those that can afford to lock the funds away, its a healthy boost to your super with a little tax deduction as a bonus!

  • animasoIa on 12/06/2023 - 17:49

    When performing a carry forward, I've been told it utilises current FY caps (at $27,500 per year) first before proceeding to prior years' caps, is that right? Does that mean it would be a terrible idea to perform a carry forward in July, and would be best to do at the end of FY, at June?

    Let's say an example of a person earning $150k annually, with employer concessional contribution at $16.5k next FY. Said person drops $15k for carry-forward in July 2023, which eats up his FY23-24 cap first, leaving only $12.5k cap remaining. By June 2024, he would be $4k over his concessional contributions, or does the ATO adjust for this?

    • goodfella on 12/06/2023 - 21:16

      Yes, you are right. One needs to get over 27500 in the current FY in order to dip into the previous year's amounts. Requires a bit of planning and yes, much easier to do it closer to the end of the FY. You can go to myGov / Superannuation / Carry-forward and check all your remaining caps for the last 5 years.

  • bargin424 on 14/06/2023 - 01:09

    Does Carry Forward Concessional apply if you overpaid super for a year? E.g) If you paid 1k over the 25k cap in 2020, can you can the tax deduction for the 1k this year?

  • tunzafun001 on 26/06/2023 - 12:29

    I had a group certificate issue since 2018.

    I was about to submit 5 years worth of returns.

    Since i havent submitted my returns yet, can I move say $50k now, then claim $10k on each previous year claim?

    Or is it too late, and i can only claim the full $50k in this 22/23 financial year?

  • tunzafun001 on 27/06/2023 - 18:45

    Hang on… So you are paying your normal tax rate (as it is a post tax contribution) ..then another 15% on top.. but then getting a deduction on your current year.

    So potentially 37.5+15% tax on your super contribution..minus the benefit (calculated at the end) of approx 14%.
    So 53.5% - 14% = super contributions taxed at 39.5%

    Seems a bit shite?

    The benefit calc, using $100k super co contribution on a 37.5% tax rate.

    You have already paid 37.5% on that 100k..but..

    $85k will land in your super account, $15 000 as tax.

    Government will take $37 500 off your taxable income, so you will pay less tax of 37 5% on that $37 500 in that year. So a benefit of 37500 *0.375 = $14 062.

    So $100k will bring a $14 062 (or 14.06% benefit) than you cant touch until your old as F.

    Or $1k contribution will bring a $140.62 benefit that cant be touched until you are probably too old to use it and they will just 'legally' steal it moving into a nursing home.

    • Edit - or wil they charge another 15% tax again when you withdraw it?
    • scanuck on 30/07/2023 - 09:15

      I believe you pay the 15% but then claim the contribution as a deduction at your marginal rate

  • bargin424 on 28/07/2023 - 02:21

    Should the carry forward concession reduce from the contribution made before 23-24 FY? Mine doesn't seem to have reduced and wondering if I did something wrong

    • goodfella on 28/07/2023 - 11:39

      Are you talking about the table in the my.gov/ATO? If yes, it gets updated around August-September I reckon

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