The Institute of Financial Professionals Australia (IFPA) have reported that following the release of the latest Average Weekly Ordinary Time Earnings (AWOTE) data for the December 2023 quarter the government has announced it will increase contribution caps on 1 July 2024 as follows:
- Concessional Contributions (CC) cap – $30,000
- Non-concessional contributions (NCC) cap – $120,000
- The maximum NCC cap permitted under the bring forward rules – $360,000
The Total Superannuation Balance (TSB) thresholds, which are used to determine the maximum available amount for bring-forward Non-Concessional Contributions (NCC), will be adjusted as follows:
| TSB at 30 June 2024 | Maximum NCC Cap | Bring Forward Period |
| < $1.66m | $360,000 | 3 years |
| $1.66 < $1.78m | $240,000 | 2 years |
| $1.78m to <$1.9m | $120,000 | 1 year |
| $1.9m + | $0 | $0 |
Please note that the overall transfer balance cap will stay at $1.9 million for the upcoming financial year 2024-25, as the Consumer Price Index (CPI) did not reach the threshold required for a $100,000 increment.
The IFPA also commented that clients who have triggered the bring forward rule either in the current year (2023-24) or the prior year (2022-23) and are still within the bring forward period, will not be subjected to the raised Non-Concessional Contributions (NCC) cap under the bring forward rules. This occurs because the Non-Concessional Contributions (NCC) cap for an individual is determined based on the standard NCC cap at the time they initiated the bring forward rule in their first year. Therefore, individuals aiming to optimise their Non-Concessional Contributions (NCCs) through the bring forward rule may consider limiting their NCCs for the current year to $110,000 or below to avoid activating the bring forward rule in the current financial year.
If you have any questions on how the changes to the contribution caps will affect you, feel free to contact us to setup a meeting to discuss them with you.