A superannuation expert has confirmed the effect any carried forward unused concessional cap contributions have on an individual’s total super balance (TSB) will have no impact on their ability to take advantage of the provision once it has been triggered.
Specifically, BT Financial Group advice strategy and technical specialist Tim Howard was asked if a person’s TSB is under the $500,000 threshold associated with the carry-forward concessional contribution rules, but the contribution made under the provision pushes their TSB over that maximum amount, whether money can still be allocated to the super fund using the available cap space.
“For example, let’s say a client had at 30 June a [total super] balance of $450,000, but has a $140,000 carry-forward [unused concessional cap] they want to put [into super] in the current financial year, that is fine,” Howard told attendees of a practitioner webinar today.
“[So] if their TSB was less than $500,000 and they want to put contributions in no matter how large, and they had carry-forward cap space of $140,000, even though that puts [their TSB] over $500,000, it is a separate issue.
“The $500,000 TSB for a carry-forward concessional contribution is just a gate-opening criteria. Once that is met, you can go and put in an amount that will take you over [a TSB of} $500,000 and that would not be a problem.”
He also dispelled any misconceptions as to whether meeting the prescribed TSB threshold for making carried forward unused cap concessional contributions impacts the amount of unused cap applicable.
“The TSB criterion just determines whether you are able to use your unused carry-forward space in a particular year. It does not stop you accruing that unused amount from earlier years,” he pointed out.
Darin Tyson-Chan
Editor
Darin is the founder and publisher of Benchmark Media, an independent publishing house whose mastheads include financialobserver, selfmanagedsuper and smstrusteenews. He has been covering the financial services space for over a decade and in this time he has worked for a variety of trade publications. Darin has also written for the Money section published in The Sydney Morning Herald and The Age.
Articles by Darin