Starting 1 July 2024, there are several changes in legislation that affect superannuation.
Contribution caps
Following a sufficient increase in AWOTE (Average Weekly Ordinary Time Earnings), superannuation contribution caps have increased to $30,000 concessional and $120,000 non-concessional.
This increase also means the three year bring forward provisions allow up to $360,000 to be contributed as non-concessional, subject to your Total Super Balance as at 30 June 2024 being less than $1.66m ($1.9m less two years non-concessional cap). If your Total Super Balance is between $1.66m and $1.78m ($1.9m less one years non-concessional cap) at 30 June 2024, you would be able to contribute a bring forward amount of $240,000 over two years. If your Total Super Balance as at 30 June 2024 is greater than $1.9m, you will have a non-concessional cap of nil.
Note that the above does not apply if you had already triggered the bring forward provisions in either FY2023 or FY2024. If so, you will need to wait for your bring forward arrangement to end before utilising the increased contribution caps.
SG rate increase
The rate of Super Guarantee contributions paid by employers is also increasing to 11.5% per legislation previously announced. This will be the final incremental increase before the SGC rate goes to 12% from 1 July 2025.
Preservation age increase
From 1 July 2024, the preservation age for super is increasing to 60 for anyone born after 1 July 1964. If you were born before this date, you would of already met your preservation age. Note that between the age of 60 and 65, you still need to meet a condition of release such as retirement or ceasing a gainful employment relationship to access super benefits without limitation.
This increase in preservation age also means the low rate cap (a limit on the amount of tax component of a super lump sum that receives a lower or nil rate of tax) no longer applies, and the taxed component of lump sum benefits received when aged under 60 are taxed at 20% plus Medicare levy. The tax-free component of a lump sum remains tax-free for the individual.
