What to do with unused concessional contributions

If you have unused concessional contributions, that is, you did not contribute the full $25,000 in 2018-19 or 2019-20, then you can carry forward these amounts for five years on a rolling basis if your total superannuation balance is below $500,000 on 30 June (of the year you intend to access the unused amount).

The ability to carry forward concessional contributions applies from 1 July 2018, with the 2019-20 financial year the first year an individual can access their unused carry forward concessional amounts.

Concessional contributions include employer contributions (super guarantee and salary sacrifice) and personal contributions that you have claimed a tax deduction for. 

For example, if your total concessional contributions in the 2019-20 financial year were $10,000 and you meet the eligibility criteria, then you can carry forward the unused $15,000. You may then be able to make a higher deductible personal contribution in a later financial year. If you are selling an asset and likely to make a taxable capital gain, a higher deductible personal contribution might assist in reducing your tax liability in the year of sale.

Remember:

• Your total superannuation balance must be below $500,000 on 30 June of the prior year before you utilise any carried forward amount (within the 5 year term); and

• In some cases, an additional 15% tax can apply (30% total) to concessional contributions made to super where income and concessional contributions exceeds the threshold ($250,000 in 2019-20). Your income could be higher than usual in the year when you sell an asset for a capital gain.

This is an excellent concession to help you top up your superannuation, especially where you are out of the workforce at some stage.

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