The latest super reforms explained by our financial planning partner Bridges.

In November 2016 the Federal Government passed into law superannuation reforms first announced in the May 2016 Federal Budget. 

These include:  

Lower concessional contributions cap

Concessional contributions are contributions you can make to super with your before-tax salary and include the Super Guarantee (SG), employer contributions, contributions made under a salary sacrifice arrangement and tax-deductible contributions by an individual. For most people concessional contributions are taxed at just 15 percent – not your marginal tax rate.

What are the new caps for concessional contributions?

The Government has now passed legislation reducing the cap on concessional contributions from 1 July 2017 as shown in the following table:


Current annual cap*

Annual cap after 1 July 2017* 

under 50



50 or over




While the concessional contribution caps are coming down, from 1 July 2018, for those with superannuation balances under $500,000, you will be able to ‘carry forward’ up to five years of the unused portion of your concessional contributions cap.

For example:

You make $10,000 in concessional contributions in the 2018/19 financial year, and $15,000 in concessional contributions in the 2019/20 financial year. In the 2020/21 financial year, you will be able to ‘carry forward’ your unused cap of $25,000 from the previous two financial years, plus your current $25,000 or a total contribution of $50,000.

Lower non-concessional contributions cap 

Non-concessional contributions (NCCs) are those contributions you make to super with your after-tax dollars.

What are the new caps for NCCs?

The Government has now passed legislation reducing the cap on non-concessional contributions from 1 July 2017 as shown in the following table:


After 1 July 2017

$180,000 annually 


$540,000 over three years for those under 65

$100,000 annually 


up to $300,000 over three years for those under 65


In addition to the lower annual caps, people with more than $1.6m in super will not be able to make non-concessional contributions from 1 July 2017.

Proposed changes are coming 1 July 2017. Now is the time to act to make the most of the current super contribution limits.

There are changes to the bring forward rule!

The ‘bring forward’ rule is a taxation rule that lets you contribute up to three times the NCC cap in a financial year by bringing forward your allowed contribution from the next two financial years. Given the $1.6m cap, the number of years you can bring forward may be limited by your super balance as shown in the following table:

Balance is between

Maximum NCC cap available

$0 - $1.4m

$300,000 (Up to three years annual cap)

$1.4m - $1.5m

$200,000 (Up to two years annual cap)

$1.5m - $1.6m

$100,000 (no bring forwards available)

$1.6m +



The bring-forward provisions are only available if you are aged under 65.

Transitional measures for bring-forward contributions from 1 July 2017

Transitional measures will apply if you trigger (or have triggered!) the bring-forward rule in 2015/16 and 2016/17 and you have not fully used your NCC ring-forward limit before  1 July 2017. Any remaining bring-forward amount will be reassessed on 1 July 2017 to reflect the new lower annual caps.

Therefore from 1 July 2017, if you:

  • triggered the bring-forward cap in 2015/16, your cap is reduced from $540,000 to $460,000 ($180,000 for 2015/16 + $180,000 for 2016/17+ $100,000 for 2017/18).
  • trigger the bring-forward cap in 2016/17, your cap will be reduced to $380,000 ($180,000 + $100,000 + $100,000).

If you have not contributed the maximum allowed under the existing NCC cap ($180,000 annually or $540,000 over three years) you should consider doing so before 30 June 2017.

Removing the earnings exemption for assets backing Transition to Retirement pensions

For those who are close to retirement, there may be an ability to access your super in a limited fashion through a transition to retirement pension. Currently, income and capital growth on the investments behind a transition to retirement pension receive the same tax treatment as a full retirement account based pension, meaning these earnings are tax-free.

From 1 July 2017, investment earnings on assets invested in a transition to retirement pension will be taxed at up to 15 per cent in line with existing tax rates on accumulation funds.

Removal of the anti-detriment payment

When someone passes away, their super benefit must be paid to a dependant (such as a spouse or child) or their estate. When this payment is a lump sum, some dependants are able to apply for an additional payment which effectively refunds a significant portion of tax paid on earnings and contributions. This ‘anti-detriment payment’ is being removed for people who pass away after 1 July 2017, and for any death benefits paid after 1 July 2019.

The work test is staying

To discourage retirees from continuing to accumulate super, the Government has in place a ‘work test’. Under the work test, a person aged between 65 and 74 may contribute to super if they have worked for at least 40 hours over 30 consecutive days in the financial year they want to make a contribution.

In the May 2016 Federal Budget, the Government proposed removing the work test. However, this proposal has been abandoned and the work test will remain.

As the Government continues to tinker with the rules affecting superannuation, opportunities will arise. To make sure you are not missing out, speak to your financial planner.

Bridges Financial Services Pty Ltd (Bridges). ABN 60 003 474 977 ASX Participant. AFSL No 240837. This is general advice only and does not take into account your financial circumstances, needs and objectives. Before making any decision based on this document, you should assess your own circumstances or seek advice from a financial planner and seek tax advice from a registered tax agent. Information is current at the date of issue and may change. Part of the IOOF group.