Super Contribution Caps To Increase
March 8, 2021
From 1 July 2021 superannuation contribution caps will increase for the first time since they were set in 2017.
The concessional contribution cap, originally set at $25,000 from 1 July 2017, is indexed by average weekly ordinary time earnings (AWOTE) in increments of $2,500.
With the announcement of the AWOTE figure for the December 2020 quarter, the concessional contribution cap is set to increase from $25,000 p.a. to $27,500 pa from 1 July 2021.
The non-concessional cap in 2021–22 will see the standard cap increased from $100,000 to $110,000 from this date.
In addition, the maximum amount a member who was under 65 at the start of the year can contribute under the non-concessional contribution cap bring-forward rule is also set to increase from $300,000 to $330,000 from 1 July 2021.
It is important to note that the proposal announced in the 2019 federal budget to extend access to the bring-forward rule to people under age 67 at the start of the first financial year is not yet law.
Therefore, only members who are aged under 65 at the beginning of the financial year will be eligible to trigger the bring-forward rule.
It is also important to consider the $1.6 million non-concessional cap threshold is changing due to the indexation of the general transfer balance cap on 1 July 2021 to $1.7 million.
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