There are several big changes to the superannuation rules coming up from the 1st of July 2024 that will have a big impact on how you plan for retirement.
Superannuation Changes from 1 July 2024
For the first time since July 2021 the Australian Government has raised the contribution caps for superannuation. Both the concessional and non-concessional contribution limits will increase – allowing you to put more of your money into super.
There are also changes to the carry-forward and bring-forward rules and how they apply before and after 30 June 2024.
The other change is an increase to the employer superannuation guarantee rate, meaning your boss, if you have one, will need to pay you more.
This article explains these three main changes happening from 1 July 2024:
- Concessional Contribution Cap and Unused Cap Amounts
- Non-Concessional Contribution Cap and Bring-Forward Arrangements
- Superannuation Guarantee (SG) Contribution Rates
Plus, at the end of the article we’ve tabled a summary of the changes by comparing the current rates and thresholds to the new rates and thresholds coming into effect on 1 July 2024.
1. Concessional Contribution Cap
On 1 July 2024, the concessional contribution cap is increasing from $27,500 to $30,000 per person, per financial year.
Also, this will be the first time that unused carry-forward contribution amounts will drop off. Specifically, any unused portion of the concessional contribution cap from the 2018/19 financial year will no longer be available as of 1 July 2024. This is because unused cap amounts can only be carried-forward for 5 years.
2. Non-Concessional Contribution Cap
On 1 July 2024, the non-concessional contribution cap is increasing from $110,000 per person per financial year to $120,000.
Therefore, the bring-forward arrangements will allow you to contribute up to $360,000 over a three-financial year period with no regard to the annual cap, provided the bring-forward rule is triggered after 1 July 2024.
3. Superannuation Guarantee Contributions
In line with incremental increases in the mandatory employer contributions, the SG rate will be increasing from 11.00% to 11.50% as of 1 July 2024 – meaning your employer, if you have one, will need to put more into your super account.
Tips to Take Advantage of the Changes
Here’s a few tips to take advantage of the upcoming super changes:
- Consider using unused amounts – If you have unused concessional contributions from the 2018/19 that you are eligible to use, you might consider taking advantage of these. Otherwise, they will be forfeited as of 1 July 2024.
- Consider being patient with bring-forward arrangements – If you are looking to make a large non-concessional contribution to superannuation, you may consider waiting until after 1 July 2024 which will give you access to a $360,000 bring-forward cap rather than $330,000.
Review salary sacrifice arrangements – An increase in the general concessional contribution cap may allow you to salary sacrifice more into superannuation; however, you should be mindful of the increase in the employer SG rate which will also influence how much you can salary sacrifice.
Summary of Superannuation Changes
The table below is an overview of the superannuation changes coming for the 2024/25 financial year and how they compare to the 2023/24 financial year:
| Rates and Thresholds | 2023/24 | 2024/25 |
|---|---|---|
| Superannuation Guarantee Rate | ||
| - Contribution Rate | 11.00% | 11.50% |
| - Maximum Contribution Base | $62,270 | $65,070 |
| Concessional Contribution Cap | $27,500 | $30,000 |
| Non-Concessional Contribution Cap | ||
| - General Cap | $110,000 | $120,000 |
| - Bring-Forward Arrangement | $330,000 | $360,000 |
| General Transfer Balance Cap | $1,900,000 | $1,900,000 |
| Government Co-Contribution | ||
| - Lower Threshold | $43,445 | $45,400 |
| - Upper Threshold | $58,445 | $60,400 |
| Total Super Balance Limits | ||
| - Catch-Up Concessional | $500,000 | $500,000 |
| - Work Test Exemption | $300,000 | $300,000 |
| Government Co-Contribution | $1,900,000 | $1,900,000 |
| Total Super Balance (Non-Concessional) | ||
| - $330k/$360k over 3 years | <$1.68M | <$1.66M |
| - $220k/$240k over 3 years | $1.68M to <$1.79M | $1.66M to <$1.78M |
| - $110k/$120k over 3 years | $1.79M to <$1.9M | $1.78M to <$1.9M |
| Small Business CGT Cap Lifetime Limit | $1,705,000 | $1,780,000 |
| Defined Benefit Income Cap | $118,750 | $1,780,000 |
| Untaxed Plan Cap | $1,705,000 | $1,780,000 |
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Thanks for stopping by - Chris
