Question 1

Hello Craig. Thank you for your interesting and informative column. I notice that the annual cap for non-concessional super contributions has increased from July 1, 2024. If one is in a bring-forward arrangement based on the current/old cap, will the additional amount ($10k pa) be available as of July 1, 2024? Many thanks, Lang

Hi Lang,

This is an important question that I have seen catch people out and led them to breach their non-concessional (after-tax) cap and have penalties imposed.

If you have already triggered a bring-forward arrangement, by making a non-concessional (after-tax) contribution above the standard annual cap, you are then locked into the cap at that time.

You cannot use the increased cap until your bring-forward arrangement has expired.

For example, if you made a non-concessional contribution of $200,000 in 2023-24 you are then locked into a maximum of $330,000 over three years.

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This is calculated as $110,000 annual cap x 3.

Therefore, in this example, you could only contribute the difference $130,000 ($330,000 minus $200,000) over the 2024-25 and 2025-26 financial years.

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As you have mentioned the cap has now increased to $120,000 from $110,000.

But in this example, you can only use the higher cap, once your three years has expired

Question 2

Can I sell my house, and deposit the $300,000 on my super without buying a downsized home?

Yes, the “downsizer super” rules are misnamed.

You still qualify to make the downsizer contribution even if you do not buy another home, or in fact you buy a bigger or more expensive home.

The main rules require:

• You have to have owned the home for at least 10 years
• You are at least 55 years of age
• The home, at least for part of its ownership, must have been your main residence, i.e. it can’t just have been an investment property or holiday home for the entire period
• You must make the contributions within 90 days of the change of ownership (settlement date). Sometimes the ATO will allow an extension on the 90 days if you apply
• You can only make one downsizer super contribution in your lifetime. 

Question 3

Hi Craig, I’m 65 and I’m hoping to retire this year initially taking Long Service Leave, then returning to work about six weeks then retiring. My question is: My husband is 69 and still working and will retire at 70. I’ve been told that if I put my $400,000+ super into pension mode from September when I retire this will affect his pension as I will be drawing approximately $50,000 until I turn 67. Should transfer my TTP back into an accumulation account and draw from this for two years? Thanks

Yes, if you move your super to a pension it will be counted in your husband’s age pension assessment.

You could leave the funds in accumulation and they won’t be counted until you attain age pension age (67).

In the interim, if you need additional money, you could just make an ad hoc lump sum withdrawal from your super as required.

Alternatively, you could move only a small amount of your super to a pension, leaving the bulk of your super in accumulation and thereby shielding it from your husband’s age pension assessment until you hit age 67.

Craig Sankey is a licensed financial adviser and head of Technical Services and Advice Enablement at Industry Fund Services.

Disclaimer: The responses provided are general in nature, and while they are prompted by the questions asked, they have been prepared without taking into consideration all your objectives, financial situation or needs.

Before relying on any of the information, please ensure that you consider the appropriateness of the information for your objectives, financial situation or needs. To the extent that it is permitted by law, no responsibility for errors or omissions is accepted by IFS and its representatives.

– TND