Bring Forward Rule
If you make Non Concessional Contributions above the annual Non Concessional Contributions Cap, you may be able to make Non Concessional Contributions of up to two or three times the annual Non Concessional Contributions Cap in that Financial Year (i.e. $220,000 cap over two years or $330,000 cap over three years). This is known as the bring-forward arrangement. It allows you to make extra Non Concessional Contributions without having to pay extra tax. There is no requirement to elect to use the Bring Forward Rule. It is automatically triggered in the first Financial Year in which a Non Concessional Contribution exceeds the annual limit.
Eligibility for the bring-forward arrangement depends on the following two factors:
Your age; and
Total Superannuation Balance on 30 June of the previous Financial Year.
1) Age Restriction Extended to 67 from 1 July 2020
Prior to 30 June 2020, if you were under 65 years of age at any time in a Financial Year, you could access the bring-forward arrangement if all other requirements were met. From 1 July 2020, the cut-off age for accessing the bring forward arrangement is extended to be under 67 years of age at any time in a Financial Year.
If you are aged 65 or 66 on 1 July of the current Financial Year and you have not previously triggered the bring-forward rule in the preceding two Financial Years, you may access the bring-forward arrangement in the current Financial Year if all other requirements are met. If you are already 67 years old or older on 1 July of the current Financial Year, you cannot access the bring-forward arrangement.
2) Total Superannuation Balance on Previous 30 June
The following table sets out the bring forward cap and bring forward period depending on the individual's Total Superannuation Balance on 30 June of the previous Financial Year after 1 July 2021:
Total Superannuation Balance on 30 June |
Contribution and Bring Forward Available
|
less than $1.48 million | 3 year ($330,000) |
$1.48 - $1.59 million |
2 year ($220,000) |
$1.59 - $1.7 million |
1 year ($110,000) |
$1.7 million or more |
Nil |
Example 1
Assume you have a Total Superannuation Balance of $200,000 at 30 June 2021 and aged under 67 on 1 July 2021. This enables you to use the Bring Forward Rule over 3 years without exceeding the Contribution Limits. Therefore, you can make Non Concessional Contribution of up to $330,000 during the 2022, 2023 and 2024 Financial Years.
In this case, the Bring Forward rule expires at the end of the 2024 Financial Year (i.e. 30 June 2024).
Example 2:
You are aged under 67 on 1 July 2021 but have a Total Superannuation Balance of $1.55 million at 30 June 2021. This means that you cannot access the full three year bring forward as this would take your balance over $1.7 million (i.e. general Transfer Balance Cap for the 2022 Financial Year). You can only make a Non Concessional Contribution of up to $220,000 during the 2022 Financial Year.
Example 3:
Assume you have a Total Superannuation Balance of $1.39 million at 30 June 2021 and are aged under 67 on 1 July 2021 (and therefore eligible for the Bring Forward Rule). You make a Non-Concessional Contribution of $150,000 in the 2022 Financial Year. This means you will have a remaining bring forward cap of $180,000 which can be made in the next two years.
However, your Total Superannuation Balance on 30 June 2022 has increased to $1.73 million (due to growth in Asset Values). This means you cannot make any further Non Concessional Contributions during the 2023 Financial Year even if you have not fully used up the $180,000 remaining bring forward cap.
Bring Forward Rule - Triggered in the 2019/2020 or 2020/2021 Financial Year:
Once you trigger the bring-forward arrangement in a year, any changes to the Non Concessional Contributions Cap during the bring-forward period does not apply to you. The bring-forward cap amount is set based on the cap in the first year of the period.
We caution that if you triggered the bring-forward arrangement in the 2019/2020 or 2020/2021 Financial Year by contributing more than $100,000 Non Concessional Contributions, your bring-forward cap will still be $300,000 ($100,000 × 3 years) or $200,000 ($100,000 × 2 years) if all other requirements are met.
The following table sets out the bring forward caps depending on when the bring forward rule was triggered:
2019-20
|
2020-21
|
2021-22
|
2022-23
|
2023-24
|
More than $100,000
|
Cannot exceed $300,000 from 2019-20 to 2021-22
|
-
|
-
|
-
|
More than $100,000
|
Cannot exceed $300,000 from 2020-21 to 2022-23
|
- |
- |
- |
More than $110,000
|
Cannot exceed $330,000 from 2021-22 to 2023-24 |
Note: Assume you meet the Eligibility Threshold on Total Superannuation Balance each Financial Year to make the Non Concessional Contributions
Bring Forward Rule - Triggered in the 2019/2020 or 2020/2021 Financial Year - An Example:
Barney made the following Non Concessional Contributions into his SMSF:
|
2019-2020
Contribution
|
2020-2021
Contribution
|
2021-2022
Contribution
|
2022-2023
Contribution
|
2023-2024
Contribution
|
Age on 1 July |
Age 63 |
Age 64 |
Age 65 |
Age 66 |
Age 67 |
Example 1 |
$200,000 |
$100,000 |
Nil |
$330,000 under Bring Forward Rule |
Nil |
Example 2 |
|
$150,000 |
$100,000 |
$50,000 |
$110,000 |
Note: Assume Barney meets the Eligibility Threshold on Total Superannuation Balance each Financial Year to make the Non Concessional Contributions.
Example 1
In Example 1, Barney triggered the "3 year bring forward rule" in the 2020 Financial Year by contributing $200,000 in December 2019. Therefore, the bring forward cap of $300,000 applies to him (calculated as $100,000 × 3 years) from the 2020 to 2022 Financial Years.
Barney cannot make further Non Concessional Contributions in the 2022 Financial Year even the annual cap has increased to $110,000 as the change to the Non Concessional Contributions Cap during the bring-forward period does not apply to him and he has used up his bring-forward cap of $300,000.
The 3 year bring forward rule expires at the end of the 2022 Financial Year and given Barney is under 67 on 1 July 2022, he can contribute up to $330,000 in the 2023 Financial Year.
Example 2
In Example 2, Barney triggered the "3 year bring forward rule" in the 2021 Financial Year by contributing $150,000 in September 2020. Therefore, the bring forward cap of $300,000 applies to him (calculated as $100,000 × 3 years) from the 2021 to 2023 Financial Years. The bring forward cap does not change even the annual cap has increased to $110,000 in the 2022 Financial Year.
Barney makes a further Non Concessional Contribution of $100,000 in the 2022 Financial Year and $50,000 in the 2023 Financial Year. The 3 year bring forward rule expires at the end of the 2023 Financial Year.
Given Barney is 67 on 1 July 2023, he is no longer eligible for the "3 year bring forward rule" and can only contribute up to $110,000 in the 2024 Financial Year provided Barney passes the work test and subject to the Total Superannuation Balance eligibility threshold.