Carry-Forward Unused Cap

Since 1 July 2018, individuals with a total super balance below $500,000 at 30 June of the previous year can carry forward unused concessional contribution cap amounts from up to 5 previous financial years. This allows you to make larger concessional contributions in a single year without exceeding your available cap, and is particularly valuable for those with irregular income or who want to make catch-up contributions.

The first year unused amounts could be accrued was 2018–19 (when the cap was $25,000). So the maximum carry-forward balance accumulated over 5 years depends on the caps that applied in each year: $25,000 for 2018–19 to 2020–21, $27,500 for 2021–22 to 2023–24, $30,000 for 2024–25 and 2025–26, and $32,500 from 2026–27. Unused amounts expire after 5 years on a first-in, first-out basis.

For example, if your SG contributions have been $15,000 per year and you haven't made any additional concessional contributions, you'd have approximately $15,000 unused cap per year. Over 5 years, that's about $75,000 of accumulated unused cap. In the current year, you could contribute up to $107,500 (current year $32,500 + $75,000 carry-forward) as concessional contributions. This strategy is commonly used when receiving a bonus, inheritance, or windfall that you want to direct into super tax-effectively.