Following the release of the latest Average Weekly Ordinary Time Earnings (AWOTE) index, the anticipated increase to the contribution caps from 1 July 2024 has been confirmed. Here are the changes:
– The Standard Concessional Contribution cap will increase from $27,500 to $30,000.
– The Non-Concessional Contribution cap, which is four times the standard concessional contribution cap, will increase from $110,000 to $120,000.
– The maximum Non-Concessional cap available, under the Non-Concessional contribution bring-forward provisions, will increase from $330,000 to $360,000.
Additionally, the Total Superannuation Balance Thresholds, used to determine the maximum amount of bring-forward Non-Concessional contributions available to an individual, will also be adjusted. Here’s the breakdown:
– For a Total Superannuation Balance (TSB) of less than $1.66 Million, the maximum available NCC Cap will be $360,000 over a period of 3 Years.
– For a TSB ranging from $1.66 to less than $1.78 Million, the maximum available NCC Cap will be $240,000 over 2 Years.
– For a TSB ranging from $1.78 to less than $1.9 Million, the maximum available NCC Cap will be $120,000 over 1 Year.
– For a TSB of $1.9 Million or above, the maximum available NCC Cap will be $0.
Moreover, several other thresholds will be impacted, including:
– Eligibility thresholds for the Superannuation Government Co-Contribution,
– CGT Contribution cap,
– Low-Rate Cap,
– Redundancy tax-free thresholds, and
– The Superannuation Guarantee maximum contribution base.
It’s noteworthy that the General Transfer Balance Cap, which is indexed according to movements in the Consumer Price Index (CPI), remains set at $1.9 Million for the 2024-25 financial year.
Lastly, an individual’s personal concessional contribution cap for 2024-25 may be higher if they’re eligible to unlock unused carried forward concessional contribution cap amounts from previous years. Additionally, individuals already in a previously triggered bring-forward period will not benefit from the increase in the Non-concessional contribution cap. Their contribution levels for 2024-25 will be limited to the amount that they had previously locked in.
Credits
Sundaram Shanmugam
Smart SMSF Team
