Since the start of the financial year, super fund members have been able to use new unused concessional cap carry forward rules to increase their contributions.
The five-year carry forward period started on 1 July 2018, so the 2019/20 year is the first one when you can actually make extra concessional contributions using any unused super contribution cap.
The concessional contribution cap is $25,000 a year. Unused amounts accrued from 1 July 2018 can be carried forward and used on a rolling five-year basis. Amounts carried forward that have not been used after five years will expire.
So, if you made $20,000 of concessional contributions in 2018/19, you can carry forward $5000 of unused cap to use over the next five years.
To be eligible to make catch-up contributions your total superannuation balance must be less than $500,000 at 30 June the previous financial year.
Work test rules apply for people over 65. The work test says that between the ages of 65 and 74 you must have worked at least 40 hours within 30 consecutive days in a financial year.
After age 75 you cannot make any personal contributions to super, but if you are still working your employer can make superannuation guarantee payments on your behalf.
If your total superannuation balance is above $500,000, the unused cap can still be accumulated up to five years and used in later years when your TSB falls below $500,000.
To use up carried forward cap amounts you may use salary sacrifice arrangements or personal deductible contributions.
The Government introduced the carry forward rules to make it easier for people with interrupted or non-standard work patterns to save for retirement and to benefit from the tax concessions in the super system in the same way as someone with a more regular income.