Catch up on your super

If you’ve had an irregular or interrupted income in the past, you might’ve missed out on opportunities to contribute to super. An upcoming change means that, in future, if you don’t fully utilise your concessional cap, and you’re eligible, you may be able to make ‘catch up’ on concessional contributions.

What is a 'catch up' concessional contribution?

It used to be a case of ‘use it or lose it’. If you couldn’t contribute the maximum annual concessional (before-tax) contribution amount to your superannuation, the opportunity was lost.

This meant many people, women in particular, had a lower super balance for their retirement. This was typically a result of their working life being interrupted by things like studying, starting a family or taking care of parents. This could also be the outcome from working in casual or part-time jobs.

However, from 1 July 2018, eligible individuals can start to accumulate unused concessional contributions and carry these forward. From 1 July 2019, you may then be able to start making use of those carried-forward amounts.

Can I make concessional contributions?

An annual cap of $27,500 applies to concessional contributions (applies in 2021/22 and may be indexed in future years). This is the most you can contribute in one year.

Concessional contributions include:

  • mandatory employer contributions (such as Super Guarantee)
  • salary sacrifice contributions (paid from your salary before it’s taxed), and
  • personal contributions that you claim a personal tax deduction for.

If your concessional contributions in a year (starting from 1 July 2021) are less than the annual cap, the ‘unused’ amount can be carried forward for the next five financial years. After five years, that unused amount will expire.

For example, if you only have total concessional contributions of $10,000 out of the available $27,500 in the 2021/22 financial year, the unused amount of $17,500 can be carried forward for the next five years. If you’re eligible, this could enable you to make a greater concessional contribution in a future year.

If you’re aged between 65 and 74 you’ll need to meet a work test to make concessional contributions– you need to have done at least 40 hours of paid work in any consecutive 30-day period that financial year. You can’t make voluntary concessional contributions once you reach age 75.


Can I make catch up contributions?

So you have an unused amount that you have carried forward from an earlier year, and you want to make a ‘top up’ carry-forward contribution. What now?

You will need to look at your ‘total super balance’ (TSB). Your TSB prior to 30 June must be less than $500,000 for you to be eligible to make the catch-up contribution using your carried forward amount.

Your total super balance at a particular time is broadly the total of the:

  • accumulation phase value of your super interests
  • value of your super pension accounts
  • rollovers in transit between super funds.

You can find your balance by contacting your fund or funds, and you’ll also find the latest balances reported to the Australia Taxation Office through the MyGov online service, opens in new window.


How you can benefit

The new rules were designed to give people with an irregular income or work pattern the same opportunities for a comfortable retirement as those with a regular income. But they could also help people who don’t contribute the maximum amount annually, and find themselves in a position to invest more in a later year.

When you get back to earning a regular income or have the capacity to invest more, you may be able to make additional top up contributions to help you ‘catch up’. This could make a real difference when you’re able to access your super as a lump sum or retirement income stream.

What to do next

From the start of the 2021/22 financial year, you can start by keeping track of your contributions in any year, particularly if you don’t make use of the full concessional contribution limit.

You can also keep track of any ‘catch-up contributions’ you make in a given year. Having these records will make it easier to see how you can best catch up in the future.

Cassandra – a case study

Cassandra is a 46-year-old earning $100,000 per year. In 2021/22, she makes total concessional super contributions of $10,000. On 30 June 2021 her total super balance is less than $500,000. This means that in 2022/23, she can make concessional contributions of up to $42.5K into super. $27.5k of this is the amount allowed under the annual concessional cap and $15,000 is her unused amount from 2018/19, which has been carried forward. The full $42.5K will be taxed at up to 15 per cent in the super fund.

Adapted from the government's fact sheet about superannuation reform, opens in new window.

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This information is provided by National Australia Bank Limited ABN 12 004 044 937 AFSL No. 230686 (NAB), a member of the National Australia Bank Group of companies. Any advice is general in nature and has been prepared without taking into account your personal objectives, financial situation or needs and because of that you should, before acting on the advice, consider the appropriateness of the advice having regard to those matters. See the NAB Financial Services Guide for details about relationships between NAB and product issuers, and remuneration or benefits that may be received in relation to NAB’s authorised services.