3 Year Bring Forward Rule

Previously, the government has announced the revised changes to the age limits for Non-Concessional Contributions from 1 July 2022, allowing them to age 75 without having to meet the work test. Now to explore in more detail the actual workings of the new Non-Concessional contributions rules and the “Bring Forward Rule” which allows lump sums to be contributed by bringing forward 2 future years of the non-concessional contribution cap to the current year.

So this year, if you are under 75, you can still use the bring-forward rule to contribute the full $360,000.  Note that you may also have already triggered that rule in one of the 2 previous financial years and be wondering how much of the cap you have remaining.

So for example;

If an SMSF member triggered the Non-Concessional Cap bring forward rule last financial year 2023-24 with a $200,000 non-concessional contribution, they could only contribute a maximum of $130,000 as a non-concessional contribution across the 2024-25 or 2025-26 financial years. This is because you triggered the bring-forward arrangement when the limit was was $110,000  per year or $330,000 using the bring-forward rule.

So for example;

If an SMSF member triggers the Non-Concessional Cap bring forward rule this financial year 2024-25 with a $200,000 non-concessional contribution, they could contribute a maximum of $160,000 as a non-concessional contribution across the 2025-26 or 2026-27 financial years. This is because you are triggering the bring-forward arrangement when the limit has increased to $120,000  per year or $360,000 using the bring-forward rule.

$1.9 million eligibility threshold and how it affects the 3 bring forward rule for contributions 

From 1 July 2017 another rule has applied that affects NCC contributions. Individuals are unable to make further NCCs where their, now indexed, Total Superannuation Balance (TSB) is $2 million or more (tested at 30 June of the previous financial year) across all Superannuation accounts not just their SMSF. Where an individual’s balance is close to $2 million, they can only make a contribution or use the bring forward to take their balance to $2 million but not beyond.

What should you do now

If you are considering making a contribution this year then I strongly recommend that you track your previous 2 years’ contributions by checking your eligibility via your MyGov App -> ATO service -> Super Tab -> Information -> Bring Forward Arrangement and using the above tables to assess how much you have contributed and how much you can now still contribute under the new rules.

I hope this guidance has been helpful and please take the time to comment. Feedback always appreciated. Please reblog, retweet, like on Facebook etc to make sure we get the news out there. As always please contact me if you want to look at your own options. We have offices in Castle Hill and Windsor but can meet clients anywhere in Sydney or via Skype. Just click the Schedule Now button up on the left to find the appointment options.

Liam Shorte B.Bus FSSA™ AFP

Financial Planner & Fellow SMSF Specialist Advisor™

PO Box 6002, Norwest NSW 2153

40/8 Victoria Ave, Castle Hill NSW 2154

Corporate Authorised Representative of Viridian Advisory Pty Ltd ABN 34 605 438 042, AFSL 476223

This information has been prepared without taking account of your objectives, financial situation or needs. Because of this you should, before acting on this information, consider its appropriateness, having regard to your objectives, financial situation and needs. This website provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such.