From 1 July 2025, there are significant superannuation regulation changes that may affect your SMSF. We are currently updating the contents on our website progressively to reflect these post 1 July 2025 changes. In the meantime, you may refer to the summary below for the key Superannuation Rates and Thresholds changes.
Concessional Contributions Changes
1. Super Guarantee Rate Increases to 12%
Superannuation Guarantee Contributions (SGC) are contributions made by an Employer for the benefit of an SMSF member.
From 1 July 2024 to 30 June 2025, your Employer was required to contribute a minimum of 11.5% of your before-tax salary income into your super account.
From 1 July 2025, your Employer is required to contribute a minimum of 12% of your before-tax salary income into your super account. This is the final scheduled increase. Please click here to check the SGC rate on the ATO website.
Superannuation Guarantee Contributions, along with Salary Sacrifice Contributions and Personal Concessional Contributions count towards the Concessional Contributions Cap. The annual Concessional Contributions Cap for the 2025/2026 Financial Year remains at $30,000 per member. If you intend to make Salary Sacrifice Contributions and/or Personal Concessional Contributions in addition to the Superannuation Guarantee Contributions made by your Employer, please ensure you will not exceed the Concessional Contributions Cap given your Superannuation Guarantee Contributions have increased after 1 July 2025.
2. Unused Concessional Cap Amount from the 2019/2020 Financial Year Has Expired
If your Total Superannuation Balance (TSB) on 30 June of the previous Financial Year is less than $500,000 and you have unused Concessional Cap amounts from the previous 5 years, you may make extra Concessional Contributions - above the General Concessional Contributions Cap.
Importantly unused Concessional Cap amounts are available for a maximum of 5 years and will expire after this. For example, the unused Concessional Cap amount from the 2020/2021 Financial Year will expire if it is not used up by the 2025/2026 Financial Year.
Accordingly, the unused Concessional Cap amount from the 2019/2020 Financial Year has expired by the end of the 2024/2025 Financial Year and should not be taken into consideration when determining your available Carry-forward Concessional Contributions for the 2025/2026 Financial Year.
You can view and manage your Concessional Contributions and Carry-forward Concessional Contributions using the ATO online services through myGov. Log in to ATO online services, select Super, then Information and navigate to Carry-forward Concessional Contributions.
Non-Concessional Contributions Changes
1. Total Superannuation Balance (TSB) Eligibility Threshold Increases to $2 million
Your eligibility for Non-concessional Contributions depends on your Total Superannuation Balance (TSB) on 30 June of the previous Financial Year.
Your Total Superannuation Balance is a way to value your superannuation interests in all your Superfunds. You can view your Total Superannuation Balance using the ATO online services through myGov. Log in to ATO online services, select Super, then Information and navigate to Total Superannuation Balance.
From 1 July 2023 to 30 June 2025, if you had a TSB of $1.9 million or more on 30 June of the previous Financial Year, you were not eligible to make Non-concessional Contributions. From 1 July 2025, the TSB Eligibility Threshold increases to $2 million. The increase is a result of indexation in line with the consumer price index.
We caution that you cannot make Non-Concessional Contributions if you are over age 75 (a special rule applies if you are turning 75).
2. Changes to Total Superannuation Balance Thresholds for Bring-forward Cap
If you are aged under 75 at any time during the Financial Year, there is capacity to make Non-concessional Contributions of up to two or three times the annual Non-concessional Contributions Cap in that Financial Year. This is known as the bring-forward arrangement. It allows you to make extra Non-concessional Contributions without having to pay extra tax.
The thresholds which determine the amount of Non-concessional Contributions Cap that you can bring forward are calculated based on the annual Non-concessional Contributions Cap and the General Transfer Balance Cap. Accordingly, the thresholds have changed in the 2025/2026 Financial Year following the increase of the General Transfer Balance Cap to $2 million. The annual Non-concessional Contributions Cap remains at $120,000 for the 2025/2026 Financial Year.
The following table sets out the bring forward cap and bring forward period for the 2025/2026 Financial Year depending on the individual's Total Superannuation Balance on 30 June 2025:
Total Superannuation Balance
On 30 June 2025
|
Contribution and
Bring Forward Available
|
| Less than $1.76 million |
3 years ($360,000) |
| $1.76 - $1.88 million |
2 years ($240,000) |
| $1.88 - $2 million |
1 year ($120,000) |
| $2 million or more |
nil |
Other Changes
1. Co-contributions
If your income is within the predetermined thresholds and you make a Non-concessional Contribution in a Financial Year, the government will match your contribution with a co-contribution up to certain limits if other criteria are met.
The income thresholds are indexed for the 2025/2026 Financial Year with the lower income threshold increases to $47,488 and the higher income threshold increases to $62,488.
In addition, the Total Superannuation Balance (TSB) Eligibility Threshold that determines if an individual is entitled to a co-contribution increases from $1.9 to $2 million. Individuals need to have a TSB of less than $2 million on 30 June 2025 to be eligible for a co-contribution, if other criteria are met.
For more information on the eligibility criteria for co-contribution, please visit the ATO website here.
2. Spouse Contributions
You can make contributions on behalf of your spouse if your spouse is under age 75 and meet the Total Superannuation Balance (TSB) Eligibility Threshold. An 18% income tax rebate for contributions up to $3,000 per annum applies if your spouse’s income is below $40,000. That is a maximum rebate of $540 pa.
From 1 July 2025, the TSB Eligibility Threshold that prohibits an individual from claiming the tax offset increases from $1.9 to $2 million. Individuals will be able to claim the offset for contributions they make on behalf of their spouse, provided the spouse's TSB is not more than $2 million on 30 June 2025, if other criteria are met.
For more information on the eligibility criteria for spouse contributions, please visit the ATO website here.
3. General Transfer Balance Cap (TBC) Increases to $2 million
The Transfer Balance Cap (TBC) is a lifetime limit on the total amount of superannuation benefits that can be transferred into the tax-free Retirement Phase account, including most Pensions and Annuities. Superannuation benefits accumulated in excess of the cap can remain in the Accumulation Account, where the earnings are taxed at up to 15%.
From 1 July 2025, the general Transfer Balance Cap (TBC) increases to $2 million. The increase is a result of indexation in line with the consumer price index. There won't be a single cap that applies to all individuals. Every individual will have their own Personal Transfer Balance Cap depending on their circumstances.
Case One: Commence a Retirement Phase Income Stream for the first time on or after 1 July 2025
If you start a Retirement Phase Income Stream for the first time on or after 1 July 2025, you will have a Personal Transfer Balance Cap of $2 million.
The following types of Income Streams are treated as a Retirement Phase Income Stream:
Case Two: Commenced a Retirement Phase Income Stream before 1 July 2025 and TBC previously reached
If you commenced a Retirement Phase Income Stream with any Superfunds and you have previously reached the TBC threshold before 1 July 2025, your Personal Transfer Balance Cap is not entitled to indexation.
This means if your Pension balance subsequently decreased due to pension withdrawals or investment losses, you will not be able to transfer any more into the Retirement Phase even if the general Transfer Balance Cap has been increased to $2 million as you have utilised 100% of your cap space previously.
Case Three: Commenced a Retirement Phase Income Stream before 1 July 2025 and TBC not fully utilised yet
Your Personal Transfer Balance Cap will be between $1.6 million to $2 million subject to proportional indexation. The amount of cap space you have available will be determined by the proportionate method based on the highest ever balance of your Transfer Balance Account.
The ATO will calculate your entitlement to indexation and your Personal Transfer Balance Cap after indexation. You can view your Personal Transfer Balance Cap using the ATO online services through myGov. If you do not yet have a myGov account, you are highly encouraged to create one. Alternatively you may contact the ATO on 13 10 20 directly to obtain this information.
Seek Professional Advice from a Financial Adviser
ESUPERFUND is a no advice model and does not provide financial advice to clients. We recommend that you seek professional advice from a financial adviser. A licensed financial adviser will consider your personal situation and make a recommendation suitable to your particular financial needs.
It should always be remembered that Trustees are legally responsible for all the decisions made even if you obtain advice from a Financial Planner. Whilst a Financial Professional can provide advice and assistance you are ultimately responsible for the SMSF.