What the 1 July super changes mean for your contributions
Concessional caps moved again this financial year, and the carry-forward rules catch a lot of people out. Here is what actually changed, who it affects, and the two decisions worth making before you contribute another dollar.
- The concessional cap is indexed again from 1 July, so last year's salary sacrifice arrangement is probably now under-contributing.
- Carry-forward unused cap only works if your total super balance was under the threshold on 30 June, and the test is a snapshot, not an average.
- If you are close to a cap, the timing of your final contribution matters more than the amount.
What actually changed
Indexation moved the concessional contributions cap again this financial year. That sounds like good news, and mostly it is, but it quietly breaks two things people set up years ago and have not looked at since: standing salary sacrifice instructions, and the assumption that last year's contribution plan still fits this year's cap.
The non-concessional cap moves with it, because it is set as a multiple of the concessional cap. If you were planning a bring-forward arrangement, the number you were working to has changed, and so has the total super balance threshold that determines whether you can use it at all.
Who this actually affects
Three groups, in order of how often we see it go wrong. First, anyone on a fixed-dollar salary sacrifice, because the dollar figure does not index itself. Second, people who had a low-income year and are now earning well, who often have several years of unused cap available and do not know it. Third, anyone near the transfer balance cap, where the interaction with a bring-forward arrangement gets genuinely technical.
The most expensive mistake is not contributing too little. It is contributing in July what you meant to contribute in June.
The two decisions worth making now
Decide whether you are contributing to the cap this year or carrying forward deliberately, and decide the date your final contribution clears. A contribution counts in the year the fund receives it, not the year you send it, and clearing houses are slow at the end of June. We work to a mid-June cut-off for exactly this reason.
If you are running an SMSF, add a third decision: whether the contribution is going in as concessional, non-concessional, or a mix, and whether the fund has the liquidity to hold it without forcing an asset sale. That is where the strategy either works or quietly does not.
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