New indexed superannuation contribution caps from 1st July 2024

The Australian government has announced updates to the superannuation contribution caps, effective from 1 July 2024. These changes are a result of the latest Average Weekly Ordinary Time Earnings (AWOTE) index release. Here are the details of the adjustments:

1. Concessional Contribution Cap Increase: The standard Concessional contribution cap will rise from $27,500 to $30,000. This cap pertains to the pre-tax contributions that can be made to a superannuation account, which are taxed at a concessional rate within the super fund.
2. Non-Concessional Contribution Cap Increase: The Non-concessional contribution cap, which applies to contributions made from after-tax income, will increase from $110,000 to $120,000. This cap is calculated as four times the standard Concessional contribution cap.
3. Maximum Non-Concessional Cap Increase: For those eligible under the Non-concessional contribution bring-forward provisions, the maximum cap will increase from $330,000 to $360,000. This provision allows individuals under 67 years to make up to three years’ worth of Non-concessional contributions in a single year.
4. Total Superannuation Balance Thresholds Adjustment: The Total Superannuation Balance Thresholds, which determine the maximum amount of bring-forward Non-concessional contributions available to an individual, will be adjusted accordingly. These thresholds help to limit the amount that individuals with higher super balances can contribute non-concessionally.

The increase in superannuation contribution caps, effective from 1 July 2024, means you can contribute more to your superannuation fund both before and after-tax, potentially enhancing your retirement savings. With the Concessional cap rising to $30,000 and the Non-concessional cap to $120,000 (or up to $360,000 under bring-forward rules), you have the opportunity to significantly increase your super balance. You can use this information to adjust your financial planning and contribution strategies, ensuring you maximize your superannuation benefits and tax advantages in preparation for retirement.

Plus 1 Group is here to help advise you any time. Please give us a call 0358333000 to discuss your options.