So how much money can a person put into superannuation? In this article, I will explain the term ‘bring-forward provision’ in relation to superannuation contribution, in particular, the amount of money you can personally put into superannuation.
The term bring-forward provision is a rule or a superannuation legislation that allows you to put in a personal contribution (non-concessional contribution) of up to 3 times the allowable contributions cap/ limit over a 3 year period.
A personal contribution or non-concessional contribution is a contribution you put into superannuation from your after-tax money, for which you did not claim (or not eligible to claim) it as a tax deduction. Under current legislation, you can only contribute a maximum of $150K non-concessional contribution to superannuation a year. This limit is called the contributions cap. Note that the non-concessional contributions cap will be increased to $180K from 1 July 2014.
If you’re under 65, you can exercise the bring-forward provision which allows you to contribute up to 3 times the annual contributions cap over a 3 year period, ie, $450K ($540K from 1/7/2014). In addition to the current year contributions cap, you’re pretty much allowed to bring forward 2 future years of non-concessional contributions and put in superannuation now. This means you will not be able to put in anymore into superannuation for the next 2 years.
The bring forward provision ceases at age 65 but if you’re under 65 on 1 July of a financial year, you are eligible to use the bring forward provision. For example, if your date of birth is 2.7.1948, you turned 65 on 2.7.2013. In this scenario, you can still use the bring forward provision and contribute $450K in 2014 financial year as you were still under 65 as at 1 July 2013. By putting in $450K in 2014, you will not be able to contribute anymore in 2015 and 2016 financial years.
Another example, if in a financial year where you contribute an amount of up to the $150K cap, you can contribute the same amount again in the next financial year as you have not used the bring forward provision. However, if you put in more than the cap, let’s say $160K, the bring forward provision is automatically trigged. In this scenario, if you wanted to you could put in a further $290K over the next 2 years only ($160K + $290K = $450K).