Happy New Financial Year!

By Colin Lewis, July 2019

The new financial year brings new opportunities for some people to top-up their superannuation.

Catch-up pre-tax concessional contributions (CCs)

If you didn’t utilise the full $25,000 CCs cap in 2018/19 then the unused amount may now be contributed this financial year provided the total amount you had in the super system – your total superannuation balance (TSB) – at 30 June 2019 was less than $500,000.

Unfortunately, any unused amounts from prior financial years have been lost.

Any unused CCs cap amount in 2018/19 can be carried forward on a rolling five-year basis.

For example, say your total CCs in 2018/19 was $20,000 then you can carry forward $5,000.

This financial year, you or your employer can make CCs up to $30,000 provided your TSB at 30 June 2019 was less than $500,000. Alternatively, you can carry the $5,000 forward up until 2023/24 provided in the year you wish to apply it, your TSB is less than $500,000 at the previous 30 June.

Carrying forward unused amounts into future years may increase the tax efficiency of those contributions if you move into a higher tax bracket but could reduce the tax effectiveness of those contributions with the reduction in personal tax rates.

If you’re not employed – so you don’t have an employer making compulsory contributions for you – you can carry forward $25,000 a year and possibly make CCs of up to $175,000 in one year (before indexation of the CCs cap and includes a contribution reserving strategy). This may be a useful strategy if you’re wishing to make a large one-off contribution, say to minimise a capital gains tax liability.

Your TSB does not affect your ability to accrue unused CCs cap amounts from year to year. It is relevant at 30 June just prior to the financial year you intend to apply your unused amounts.

For example, if you want to apply an unused CCs cap amount in 2021/22, then your TSB at 30 June 2021 must be less than $500,000.

New work test exemption (WTE)

If you’re aged 65 to 74 and retired in 2018/19, you may be able to contribute this financial year even though you’re not working. Normally, you must meet the ‘work test’ to contribute, i.e. be gainfully employed for 40 hours in a 30 consecutive day period.

If you’re in this age range and won’t meet the work test in 2019/20 and wish to make voluntary super contributions under the WTE, you must have satisfied the work test in 2018/19 and had a TSB at 30 June 2019 of less than $300,000.

You cannot use the WTE if you fully retired before 2018/19 as the work test must be satisfied in the financial year preceding the year you wish to contribute.

The contribution caps still apply.

The WTE may be used in conjunction with the after-tax non-concessional contributions (NCCs) bring-forward rule and the carry forward of unused CCs cap amounts.

Take Bert who turns 65 on 1 October 2019. He retired from full-time work on 1 May 2019 and will not work in 2019/20.

On 30 June 2019, his TSB was $295,000 and he has not made NCCs in the past two financial years.

From 1 July to 30 September 2019, Bert can make CCs of $25,000 and NCCs of up to $300,000 in the usual manner as he is under age 65.

What’s new is that if Bert doesn’t make these contributions before his 65th birthday, he can now make them from 1 October 2019 to 30 June 2020 under the WTE.

If Bert had retired a year earlier on 1 May 2018, he wouldn’t be able to use the WTE (because he didn’t meet the work test in 2018/19) and must make the contributions before his 65th birthday.

Then there’s Julia who will retire from full-time work on 1 August 2019. She also turns 65 on 1 October 2019.

On 30 June 2019, her TSB was $150,000 and she has not made NCCs in the past two financial years.

Julia meets the work test in 2019/20 and is eligible to trigger the 3-year bring-forward rule, but only has available funds of $110,000 to contribute to super.

In 2020/21, Julia can contribute the balance of $190,000 under the WTE, provided her TSB on 30 June 2020 is less than $300,000.

What’s coming next year?

Further changes announced in this year’s Budget are in the pipeline. If these proposals become law, then there may be further opportunities for you to get money into super.
From 1 July 2020, it’s proposed that people aged 65 and 66 will be able to make voluntary contributions without meeting the work test, helping those who are retired, or only work one day a week, or volunteer.

This aligns the superannuation work test with the eligibility age for the Age Pension scheduled to reach age 67 from 1 July 2023. Accordingly, voluntary contributions could be made up to Age Pension, regardless of whether you’re working.

In concert with this change, the NCCs bring-forward rule would be extended to people aged 65 and 66. So, if you’re under age 67 any time in a financial year, you may be able to trigger the NCCs bring-forward rule and contribute up to $300,000 year even if you’re not working. Of course, the bring-forward rule remains subject to your TSB at the previous 30 June.

If you’re a retiree couple aged 65 or 66 selling your home, you may be able to contribute up to $1.2 million from the sale proceeds.

Also, from 1 July 2020, the age limit for spouse contributions will be increased from 69 to 74 years of age – the receiving spouse must meet the work test from age 67.

Currently, people aged 70 or more cannot receive contributions made by a contributing spouse on their behalf.

The ability to make spouse contributions for a further five years will extend the period a spouse may claim a tax offset for spouse contributions.


Stay informed and on top of your financial game plan.


Visit our library of resources containing educational articles and videos to help you live a great life and to keep you updated on financial matters.


Our Private Wealth Program gives you a financial road map, including action plan to achieve your three and 10 year goals.