Bring Forward Rule

bring-forward-rule12In general, the superannuation contributions caps limits apply on a year by year basis. However the bring-forward rules allow for unused caps to be used in later years, subject to conditions and limits.

The rules for non-concessional contributions have been amended (along with transitional rules) with effect from 1 July 2017.

Contributions from 1 July 2017 are subject to the new rules under which the maximum becomes $300,000 for bring forwards triggered after 30 June 2017.

Thus the year ended 30 June 2017 is the final year in which a maximum bring forward contribution of $540,000 (being 3 x $180,000) could have been available.

The bring-forward rule currently (and since 1 July 2017) allows contributors under 65 to bring-forward their unused non-concessional cap of up to $300,000 (based on $100,000 per year) without exceeding their non-concessional cap.

[April 1, 2019] Ahead of the budget the Treasurer has announced that the age limit for access to the bring-forward arrangements will be extended to those aged 65 and 66. This is measure is subject to legislation being passed.

[March 5, 2020] Draft legislation has been released to  to extend access to the bring‑forward arrangements to people aged 65 and 66. See Media release.

They also allow people aged 70 to 74 to receive spouse contributions by increasing the maximum age from 69 to 74 years.

Transitional rules

The introduction of a lower non-concessional contributions cap from 1 July 2017 (and therefore lower bring-forward value) is subject to transitional rules for bring-forwards already triggered before 1 July 2017.

The rules are complex. The information here is not advice, and cannot be used as the basis of planning or action without obtaining qualified financial advice.

Transitional maximum non-concessional bring-forward amounts*

*The introduction of the transfer balance of $1.6 million from 1 July 2017 further modifies available bring forward totals, according to how close the total super balance is to the cap on 30 June 2017.

Non-concessional bring-forward periods – 2017-18 – based on total superannuation balance at 30 June 2017

 Total super balance
at 30 June 2017
Non-concessional contributions
cap for the first year
Bring forward period
Less than $1.4 million$300,0003 years
$1.4 million to less than $1.5 million$200,0002 years
$1.5 million to less than $1.6 million$100,0001 year
$1.6 million+nilnil

See further:

From 1 July 2018 – carry forward of unused concessional contributions

From 1 July 2018, new rules will apply for the bring-forward of unused concessional contributions cap, which is set at $25,000 (indexed) per annum from 1 July 2017.

  • Unused concessional contributions cap (from the new cap limit of $25,000 per annum) can be carried forward for a maximum of 5 years.
  • The carry-forward can only be used if the total superannuation balance is less than $500,000 (as at 30 June of previous financial year)
  • The first financial year in which you can access unused concessional contributions is 2019–20

See more: Concessional cap changes

The rules up to 30 June 2017 – non-concessional contributions

The “bring-forward rule” applies a 3-year period to non-concessional contributions subject to certain conditions.

The cap under the bring-forward rule is broadened to three times the annual non-concessional limit over 3 years from the year the rule is triggered (i.e. the first year).

The rule is automatically triggered in the first year that contributions go over the annual limit. (ITAA 97 s292.85(4))

Tax concessions on superannuation contributions are limited by the contributions caps. Broadly, different caps apply to two types of contribution:

  • concessional contributions – contributions for which a tax deduction has been obtained
  • non-concessional contributions – contributions from after-tax income

There is more information on contributions caps here.

Non-concessional contributions caps

Annual non-concessional contributions caps in previous years were:

  • for 2016-17 $180,000
  • for 2015-16 $180,000
  • for 2014-15 $180,000
  • for 2013-14 $150,000

Thus if the bring-forward rule was triggered in 2013-14, the applicable non-concessional cap would be (3 x $150,000 = ) $450,000. Under the rule, a contribution of $450,000 could have been made in 2013-14 without penalty, provided no other non-concessional contributions were made in the later 2 years.

If triggered in a later year, the bring-forward amount would be $540,000.

The 3 year period commences in the year that the contributions cap is exceeded. The benefit of the rule is to allow the annual non-concessional cap to be exceeded in any one or two-year period without suffering a tax penalty, as long as the 3-year aggregated limit is not exceeded.

Contributions in excess of the contributions cap automatically attract tax equivalent to the top marginal tax rate plus medicare levy, although withdrawal rules can be applied.

Bring forward rule basic conditions

  • applies to non-concessional contributions – that is contributions for which a tax deduction is not claimed
  • age of member must be under 65 at any time in the first financial year (i.e.the year the 3-year rule is triggered)
  • a member aged 65 years or more in the 2nd and 3rd years can continue (but not trigger) contributions under the 3-year ceiling, but only subject to the work test requirements and the relevant later years’ non-concessional limit.

The work test for ages 65 to 74 years old require the member to be gainfully employed; i.e. paid work for at least 40 hours during a consecutive 30-day period in each financial year for which the super contributions are made.

Bring-forward rule – tips and traps

Errors can easily be made, especially when trying to maximise super contribution tax concessions. There are adverse tax consequences for excess contributions.

The following are a few points to watch:

Bring-forward calculation is based on the trigger year

The 3 year limit is calculated from 3 times the annual limit in the year that the bring-forward rule is triggered. A higher limit in a later year (e.g. 2014-15 $180,000 increased from $150,000 in 2013-14) does not apply if the bring-forward rule was already triggered in the earlier year, because it’s the first-year limit which is used in the 3-year calculation. If triggered in 2013-14, the 3-year limit is $450,000. If triggered in 2014-15 or 2015-16 (i.e. a contribution exceeding $180,000) then the three year limit would be $540,000.

Check arithmetic carefully

The annual limit rules are strict – simply exceeding the limit by one dollar (e.g. a non-concessional contribution of $150,001 in 2013-14 or $180,001 in 2014-15 or 2015-16) can cause the annual limit to exceeded, and the 3 year rule to be triggered or exceeded if in a later year.

Check the timing of contributions carefully

Missing a target deadline, for example a year-end date, can have the effect of shifting the record of contributions from one financial period to another, with significantly altered tax consequences.

If coming up to a year-end, ideally leave plenty of time for payments to move through office and bank clearing processes.

Tell your advisers everything

If you engage professional advisers to help maximise advantages under the super concessions (recommended in this complex area), make sure they have all information and relevant personal data. One crucial omission could easily result in erroneous advice.

Aside from a full financial planning profile, relevant superannuation information includes the financial statements of your super fund(s), earnings and past contributions and drawings and their sources, dates and compliance history.

Check all contributions, concessional and non-concessional

Inadvertently triggering the 3-year rule can occur if all contributions to all super funds are not taken into account when calculating contributions. In particular, the Tax Office advise that:

  • any concessional contributions over the cap in a year are counted in the non-concessional cap for that year.
  • life insurance premiums and fund fees can count as contributions
  • a withdrawal and re-contribution can result in an excess when the latter is counted in the cap limit, even if the original withdrawal amount was sourced from contributions made under the cap

Bring-forward applies for 3 years

Once the 3 year rule is triggered, the contributions cap applies for the 3 year period (whether used or not) and cannot be triggered again until after the 3 year period.


This page was last modified 2020-03-06