A superannuation specialist has reminded practitioners about the applicability of the higher non-concessional contributions cap to be implemented on 1 July with regard to the bring-forward rules.
“Now just remember for those clients of yours that may have already triggered the bring-forward arrangement, whether that was last financial year or this current financial year, they won’t get the benefit of the indexation and the increased cap because once you’ve triggered the bring-forward [provisions], you’re locked into the non-concessional [contributions] cap in the year that you triggered it,” Institute of Financial Professionals Australia head of superannuation and financial services Natasha Panagis told delegates at the industry body’s 2024 conference hosted in Melbourne last week.
“[The new bring-forward levels] are mainly for new people from 1 July of this year who have not triggered the bring-forward arrangements.
“So just be careful for those clients who are looking to maximise contributions [and the strategies they undertake now].”
To this end, she suggested exercising prudence in assessing the amount to which a client should commit in this income year.
“Maybe look at [making a non-concessional contribution] of $110,000 in this financial year to give them the opportunity to take advantage of the higher non-concessional [contributions] cap from 1 July 2024,” she said.
The average weekly ordinary time earnings figure released in November 2023 confirmed the yearly concessional contributions cap will increase from 1 July 2024 from its current level of $27,500 to $30,000.
As a result, the annual non-concessional contributions cap will also jump from this date from $110,000 to $120,000, being four times the concessional cap.
In turn, this means the amounts available to be used if taking advantage of the bring-forward provisions will rise from $220,000 to $240,000 for a two-year period and from $330,000 to $ 360,000 for a three-year period at that time.
