So How Much Can I Contribute to my SMSF Using the Bring Forward Rule


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3 Year Bring Forward Rule

So in the last budget, 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 $330,000.  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 2021-22 with a $200,000 non-concessional contribution, they could only contribute a maximum of $130,000 as a non-concessional contribution across the 2022-23 or 2023-24 financial years.

$1.7 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 $1.7 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 $1.7 million, they can only make a contribution or use the bring forward to take their balance to $1.7 million but not beyond.

TSB on 30 June  of prior financial year Contribution and bring-forward available
Less than $1.48m 3 years ($330,000)
$1.48m to < $1.59m 2 years ($220,000)
$1.59m to < $1.7m 1 year ($110,000, no bring-forward available)
$1.7m and above Ni

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.

Bring Forward Arrangements

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 SSA™ AFP

Financial Planner & SMSF Specialist Advisor™

SMSF Specialist Adviser 

 Follow SMSFCoach on Twitter Liam Shorte on Linkedin NextGen Wealth on Facebook   

Verante Financial Planning

Tel: 02 98941844, Mobile: 0413 936 299

PO Box 6002 BHBC, Baulkham Hills NSW 2153

5/15 Terminus St. 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.

What are the New Age limits & Work Test Restrictions for Superannuation Contributions from July 2013?


This is crucial for employers, self-employed and anyone considering working past age 65. It is important to understand that it is your age on the date of the contribution that counts. Employees currently do not receive the 9% SG contribution after the age of 70 but that will change on July 1st 2013 so here is an update.

Member’s age at date of contribution Can my SMSF or Superannuation fund accept this contribution?
Under 65 No age limit or work restriction applies
65 but under 75 Mandated Employer Contributions – for example including superannuation guarantee contributions (SGC , usually 9%),                                      orMust have been gainfully employed on at least a part-time basis for at least 40 hours in any one day period during the financial year in which the contributions are made.
75 + Mandated Employer Contributions – including super guarantee contributions (SGC). You cannot make personal voluntary concessional or non-concessional contributions regardless of meeting the work test or not.

 
There is a slight leeway for people to make contributions shortly after their 75th birthday in that the rules allow for a contribution during the period 28 days after the end of the month in which the member turns 75.

Also A regulated superannuation fund may accept contributions in respect of a member if the trustee is reasonably satisfied that a contribution is in respect of a period during which the fund may accept the contribution in respect of that member, even though the contribution is actually made after that period. So if your employer forgot to make a payment and does a catch-up contribution after you have passed an age limit.

Remedy:

If a SMSF or other regulated superannuation fund receives a contribution for a member who does not meet the relevant age and work test it must reject it or return it to the entity making the contribution within 30 days of becoming aware of the breach.

For SMSF trustees the ATO appears to have a more stringent view that the deadline is 30 days from the date of the excess contribution not 30 days from when they become aware of the breach. That is an “ATO view” so not written in to the regulations and subject to challenge.

Tax File Number

The regulated superannuation fund must not accept any member contributions if the member’s tax file number has not been quoted (for superannuation purposes) to the trustee of the fund.

For more information on the existing rules refer to REG 7.04 of the SUPERANNUATION INDUSTRY (SUPERVISION) REGULATIONS 1994 and for the changes http://www.moresuper.gov.au/content/Content.aspx?doc=faqs.htm

One final note – Increase to SG Contributions

Employers need to ensure they implement the new Superannuation Guarantee (SG) changes which take effect on 1 July 2013. Specifically, the SG rate will increase from 9.0% to 9.25% from that date. Further increases will apply in subsequent years until the rate reaches 12% in 2019/20

For employers; to assess if you need to pay Superannuation guarantee payments for a particular person you can use the ATO’s SG Eligibility Decision Tool

As always please contact me if you want to look at your own particular situation . We have offices in Castle Hill and Windsor but can meet clients anywhere in Sydney or via Skype.

Liam Shorte B.Bus SSA™ AFP

Financial Planner & SMSF Specialist Advisor™

SMSF Specialist Adviser 

 Follow SMSFCoach on Twitter Liam Shorte on Linkedin NextGen Wealth on Facebook   

Verante Financial Planning

Tel: 02 98941844, Mobile: 0413 936 299

PO Box 6002 BHBC, Baulkham Hills NSW 2153

5/15 Terminus St. Castle Hill NSW 2154

Corporate Authorised Representative of Viridian Select Pty Ltd ABN 41 621 447 345, AFSL 51572

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.

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