Understanding the bring-forward rule

Thinking of boosting your super with a lump sum? The Non-Concessional Contributions (NCC) bring-forward rule makes it possible to contribute up to $480,000 per person over two financial years, even if you are not working – and it’s available up to age 75.

The bring-forward rule explained

This rule allows you to make larger, after-tax contributions (NCCs) over a shorter period by ‘bringing forward’ your next one or two years of contribution caps.

Your limits: age and total super balance (TSB)

Your eligibility and maximum contribution amount depend on two critical factors: your age and your Total Super Balance (TSB).

The hard age deadline: turning 75

Timing is absolutely critical. You must be under age 75 on 1 July of the financial year to be eligible to trigger a new bring-forward period.

What are the key rules for turning 75?

If you turn 75 during the financial year, you get a small, final window to make contributions, as follows:

1. The deadline: Your super fund can accept voluntary contributions (including using any remaining bring-forward amount) up until the 28th day after the month you turn 75.

    

2. After the deadline: Once the 28-day period ends, you can generally only make compulsory employer contributions (Super Guarantee), although the downsizer contribution of up to $300,000 from the sale of your former home is an option available at any age.

    

A note on the Work test:

A work test is not required for making NCC contributions  However, If you are planning to claim a tax deduction for some of your lump sum contributions, (and have them count in your concessional contribution cap instead which is taxed at 15%) you will need to meet a work test and have a TSB of less than $500,000. For anyone who is over 67 but not yet 75, you generally need to meet the ‘work test’ by working 40 hours in 30 days or qualify for a work test exemption by having met the work test the previous financial year and with a TSB balance below $300,000.

Knowing your Total Super Balance (TSB)

Whether you can use the bring-forward rule and how much you can contribute depends upon your total super balance (TSB) at the end of the previous financial year.

For most people, if your super balance is at least $360,000 less than $2 million, you can take full advantage of the bring-forward rule. That means you could contribute a significant lump sum in a single year to accelerate your retirement savings.

If your balance approaches $2 million you will be limited in making NCCs by how close your balance is to being within $360,000 of the $2 million limit.

3. Your next steps: don’t guess, check!

To ensure that you are able to contribute confidently and avoid excess contributions tax, you must confirm your exact limits and history:

• Check MyGov/ATO: The most reliable place to find your TSB, contribution history, and current bring-forward status is by logging into the ATO online services via MyGov (Navigate to Super > Information > Non-concessional contributions).
• Check with your fund: Because the ATO data may have reporting delays, it’s best practice to also confirm your details with your super fund(s) to ensure the information is up-to-date and accurate before making a large contribution.
• Look back: Always check your contribution history for the past three financial years. If you triggered the bring-forward rule previously and didn’t use the full amount, the unused portion may still be available.

   

Thoughtful planning and checking your limits are the keys to safely boosting your retirement savings. To explore whether a lump sum contribution strategy will work for you, it helps to consider questions such as:

• What would the effect be on my Age Pension if I make a big lump sum contribution to my super this year?
• Is it better to boost my superannuation savings or pay down my mortgage?

^{The information shown on this website contains general information only and does not take account your specific objectives, financial situation needs or personal circumstances. You should seek personal advice or professional financial advice, consider your own circumstances and read our Product Disclosure Statement (PDS) before making a decision about Prime Super. A copy of the PDS and Target Market Determination is available by calling 1800 675 839 or by visiting primesuper.com.au/pds}