There is a raft of super changes that have come into effect from 1 July 2021. The start of a new financial year is always a great time to review your superannuation strategy. To assist you with your review, here is a summary of the new contribution rules and our top 5 strategies.

Concessional contributions limit

Concessional contributions (CCs) are usually tax deductible to the contributor (eg individual taxpayer or employer). The new annual limit for concessional contributions is $27,500. Concessional contributions include superannuation guarantee (SGC), salary sacrifice or personal deductible (before tax) contributions. Remember that SGC is now 10% for all employees from 1 July.

Strategy 1 - Maximise your concessional contributions

You could review your super contributions and consider increasing your contributions to take advantage of the new concessional contribution limit of $27,500 per annum. If you are an employee remember to take into account the increased SGC from your Employer.

Contributions carry forward (CCs)

If your total superannuation balance is below $500,000 you may be able to carry forward unused concessional contribution limit amounts from 1 July 2018 for up to five financial years. If eligible, you can make contributions in excess of the standard annual limit as your new annual cap will include the unused CCs from prior years as well as the annual cap for the current year. This allows those who do not use all of their concessional cap in a particular financial year to carry forward their unused concessional cap amounts to future years.


  • have a total superannuation balance (from all sources) of less than $500,000 as at 30 June at the end of the financial year immediately preceding the financial year in which the concessional contribution is to be made
  • have previously unused concessional contributions cap amounts that have accrued since 2018/19 or later.

Strategy 2 - Review your super

Review your total super balance and take advantage of any unused concessional contributions. Here’s an example. Julia had a total super balance as at 30 June 2021 of $400,000 and has consistently earned $100,000 per annum for the last few years. Julia has made the following contributions:

Year 2018/2019 2019/2020 2020/2021 2021/2022
Cap limit $25,000 $25,000 $25,000 $27,500
Contribution made/expected* $9,500 $9,500 $9,500 $10,000*
Cap remaining $15,500 $15,500 $15,500 $17,500
Cumulative carry forward available $15,500 $31,000 $46,500  

*Expected in the 2021-2022 year.

For the 2021/2022 year Julia has a concessional contribution cap limit of $74,000 ($46,500 + $27,500). She expects to receive $10,000 from her employer in SGC for this year, providing her with an expected cumulative carry forward concessional contribution limit of $64,000 ($46,500 + $17,500).

Julia is about to sell her investment property and expects to make an $80,000 assessable gain on the sale of the property. This gain would normally be taxed at her marginal tax rate plus Medicare levy (ie. between 32.5% and 37%). However, if Julia contributes $64,000 of the assessable gain into her super under the carry forward contribution rules, she will create a $64,000 personal tax deduction which has the effect of reducing the taxable gain to around $16,000. This will save around $24,780 in total personal tax and Medicare levy. Please note that the contribution will be taxed at 15% on the way into super and Julia will need to carefully consider the fact that the funds will then be preserved until she meets a condition of release.

Non-concessional contributions limit

Non-concessional contributions (NCCs) may provide a significant opportunity to contribute to superannuation. Like other contribution types, limits and eligibility rules determine the amount and timing of NCCs, and penalties apply if limits are breached.
Non-concessional contributions are personal, non-deductible contributions (after-tax contributions). An annual cap of $110,000 per person now applies.

Bring Forward Rule (NCCs)

You may be eligible to bring forward the next two years of non-concessional contributions into the current year by using the bring forward provision.
The ability to invoke the bring-forward provisions is now available to individuals who are aged under 67 on 1 July of a financial year depending on your total super balance:

Total superannuation balance Contribution available under 67 Contribution available over 67
Less than $1.48 million Access to $330,000 cap (over 3 years) $110,000
$1.48 million - $1.59 million Access to $220,000 cap (over 2 years) $110,000
$1.59 million - $1.7 million Access to $110,000 cap (over 1 year) $100,000
Greater than $1.7 million Nil Nil


Strategy 3 - Non-concessional contribution

Take advantage of non-concessional contribution rules, where you have surplus funds and a total super balance of less than $1.48m as at 30 June of the previous financial year.

For example, Aryan is aged 56 and has recently received an inheritance. He wants to maximise how much he contributes to super so he contributes $330,000 as a non-concessional contribution this year.

People who are aged over 60 should carefully consider the remaining years to contribute, before making non-concessional contributions. For example, Minna is aged under 65 at 1 July this year, so could theoretically make the following contributions over the coming 3 years:

  Turning age 65 Turning age 66 Turning age 67 Total
Option A $330,000 X X $330,000
Option B $110,000 $330,000 X $440,000
Option C $110,000 $110,000 $330,000 $550,000


As you can see there is a large difference in the amount that Minna can contribute over the 3 year period, depending on the order in which she makes the contributions. The final contribution would need to be made prior to Minna turning age 67. Care would need to be taken to ensure that the total super balance remains under $1.48M prior to the final year contributions.

Downsizer contribution

If you are 65 or older you may be eligible to make a downsizer contribution into superannuation of up to $300,000 from the proceeds of the sale of your main residence. This contribution must be made within 90 days of the sale of your home. This is excluded from the standard contribution limit however eligibility criteria applies.

Strategy 4 - Make a downsizer contribution

Robert and Naomie have lived in the same property for the last 23 years, which they have recently sold for $1.2M.  Robert and Naomie plan to move to Hervey Bay for a seaside change, where they can buy their dream retirement home for $600,000. They decide to contribute $300,000 each to super as downsizer contributions and can then live comfortably on Account Based Pensions for the rest of their lives. It is important to note that the downsizer contribution rules are very generous and you should ensure you understand the eligibility of both members of a couple, even where the property may only have been owned by one member.

Strategy 5 - Downsizer contribution and non-concessional contribution

Carefully consider the interplay of different contribution rules and combine a downsizer contribution with a non-concessional contribution. Downsizer contributions are not treated as a NCC, so a couple aged 66 could now get a total of $1.48M into super over two years as follows:

  Turning age 66 Turning age 67 Total
Downsizer Mary $300,000   $300,000
Downsizer James $300,000   $300,000
Non-Concessional Mary $110,000 $330,000 $440,000
Non-Concessional James $110,000 $330,000 $440,000
    Total  $1,480,000


Contribution eligibility

Eligibility for contributions is more complex than ever and you need to understand what contributions you can make at different ages:

Age Mandated contributions (superannuation guarantee) Voluntary employer Member contributions Downsizer contributions
Under 65 Yes Yes Yes No
65 - 66 Yes Yes Yes Yes
67 - 74 Yes Work test (or exemption required) Work test (or exemption required)  Yes
Over 75 Yes No No Yes

Member Contribution = Voluntary concessional contribution (personal tax deductible), non-concessional contribution & spouse contributions
Voluntary Employer = Salary sacrifice or employer contributions above superannuation guarantee

Work test

Where an individual wishes to make a contribution (other than a Downsizer) and they are aged 67 to 74 the work test or work test exemption requirements need to be satisfied in each financial year in which they wish to contribute. The work test must be met prior to the contribution being made each financial year.

The work test requires you to have been gainfully employed for at least 40 hours in a period of 30 consecutive days.

Work test exemption

If your total superannuation balance is under $300,000 at 30 June in the prior year and you are aged 67-74 you are eligible for the work test exemption. This exemption is relevant for a 12-month period from the end of the financial year in which you last met the work test.

SMSFs now allowed to have 6 members

With Treasury Laws Amendment (Self Managed Superannuation Funds) Bill 2020 receiving royal assent on 22 June 2021, SMSFs can, from 1 July 2021, have up to six members.

The SMSF Association notes that “with approximately 93% of SMSFs having either one or two members, we remain of the view that these changes are unlikely to affect many SMSFs.”

There are a number of reasons why families may choose to have adult children in the super fund with their parents, here are my top three:

1. Estate Planning
Charles and Helena have a SMSF with a current value of $5 million. They have substantial retirement assets outside of super and want to reduce the amount of estate tax that may be payable on their superannuation benefits. They have four adult children with whom they have healthy and happy relationships.

Charles and Helena decide to withdraw $1.32 million from their SMSF and then immediately contribute it back into the Super Fund - $330,000 for each adult child. In this manner, they can reduce potential estate tax by around $224,000.

There are however several downsides to this.

  • They cannot compel the children to retain the funds in the SMSF – one or more of the children could decide to roll over their super to another Super Fund;
  • If any of their adult children get divorced the super is a splittable asset in the division of matrimonial assets;
  • The children had no idea of their parent’s financial position and will now have to see and sign the Financials for the Super Fund and be consulted on the running of the Fund.

2. Giving your kids a hand up - delayed gratification
Lou and Rosa would like to give their kids a hand up but want them to have delayed gratification, so they don’t “spoil” them now. Their two children are in their early 20s.

Lou and Rosa have a substantial SMSF and again also have assets outside of Super. They decide to contribute $110,000 per annum for each of the children for 5 years. At that point the $550,000 for each child will be allowed to compound away for their children’s retirement, giving them an excellent head start.

The downsides:

  • All of the downsides from the previous example; plus
  • Their children will be unable to make further non-concessional contributions for the next 5 years unless they trigger a bring forward.

3. Giving your kids a hand up - multi-generation family business
Norm and Stephanie are the second generation in a large and successful family business. They are conscious of the assistance they received from Norm’s parents and wish to pass it on to their children. The business acquires a number of storage facilities and expands every few years. Norm and Stephanie have four adult children aged in their early 30s who are all involved in the business and who are now integral to its success.

Norm and Stephanie decide to contribute $110,000 per annum for each of the children for 5 years. At that point, the total of $2.2M plus growth will be used to purchase the next storage facility for the business. The storage facility is expected to provide a rental return of 9% per annum making it an excellent SMSF asset.

The downsides:

  • All of the downsides from the previous examples;
  • Norm and Stephanie would need to ensure their children’s own estate planning is up to date and may need to consider life insurance to be owned by the Super Fund to ensure that if one of the children predecease them, they do not have to liquidate Super Fund assets to pay out a death benefit.

We are here to help

If you have any questions about the abovementioned superannuation information or wish to make an appointment with one of our Wealth Advisors to talk about your financial future, then please, get in touch with the Ulton Wealth Management team today.



This communication has been prepared on a general advice basis only. The information has not been prepared to take into account your specific objectives, needs and financial situation. The information may not be appropriate to your individual's needs and you should seek advice from your financial adviser before making any investment decisions. All wealth management services are provided by Ulton Wealth Management Pty Ltd Corporate Authorised Representative No 460875 of Ulton Wealth Services Pty Ltd AFSL NO.: 497721 | ABN: 86 614 308 628 | | Ulton Wealth Management Pty Ltd ABN 73 168 815 450 | *Kylie Wright (245052), is a Sub Authorised Representative of Ulton Wealth Management Pty Ltd

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