Investing in super using empowering super rules.
People sometimes think of super as a closed box. But it’s actually the opposite as Australian super rules are very empowering for individuals.
Your super could be the investment you have that may offer you a favorable tax treatment over time, and there are two super rules you might be able to take advantage of right now, and into the future, to financially benefit you. Depending on your financial situation, these two rules could be used together, or singly.
As with any financial situation, be sure to seek financial and tax advice to inform your decisions. Don’t forget that super is an investment in itself with many advantages, and you have the power to direct it.
Catch up on contributions (before tax)
If you have a total super balance of less than $500,000 from the previous financial year, you can carry-forward any unused concessional caps on a rolling 5-year basis.
This means if you don’t contribute the maximum annual allowable amount into your super, you can increase your contributions in following years by those unused amounts (for a maximum of five years, after which they will expire) by using the carry-forward rule.
This rule applies from 1 July 2018. This means that the 2020 financial year is the first year in which you can top-up your super contributions by the carry forward amount.
Annual concessional contribution caps (or limits):
| Financial year | Contribution cap |
| 2018 - 2019 | $25,000 |
| 2019 - 2020 | $25,000 |
| 2020 - 2021 | $25,000 |
| 2021 - 2022 | $27,500 |
| 2022 - 2023 | $27,500 |
Bring-forward rule (after tax)
Those under 65 years old can bring forward future annual non-concessional (after tax) contributions cap entitlements, based on their total superannuation balance as at 30 June the previous financial year. This could mean up to $330,000 – or three times the 2022-23 $110,000 annual non-concessional contributions cap – into your super in one financial year.
Annual non-concessional contribution caps (or limits):
| Financial year | Non-concessional contribution cap |
| 2022 - 2023 | $110,000 |
Amounts over the non-concessional cap are taxed at 47% for the 2022-23 financial year. Essentially, those who use the rule are 'bringing forward' their next two years of caps into the current year.
It’s worth noting, if you trigger the bring-forward rule, the concessional contribution cap for the financial year that it was triggered will still apply, even if the following year (e.g. 2022-23) the concessional contribution cap increases.
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The information contained in this article does not constitute financial product advice. REI Super does not give any warranty to the accuracy, completeness or currency of the information provided. Although REI Super makes every reasonable effort to maintain current and accurate information, you should be aware that there is still the possibility of inadvertent errors and technical inaccuracies. REI Superannuation Fund Pty Ltd ABN 68 056 044 770, AFSL 240569, RSE L0000314 Trustee of REI Super (ABN 76 641 658 449), SPIN REI0001AU, RSE R1000412. MySuper unique identifier 76641658449129. May 2023.