Maximize Your Wealth: Understanding the increases to Super Contribution Caps in 2024

Increases to Superannuation Contribution Caps

Recent wage increases will lead to higher super contribution caps for the 2024–25 income year. The Australian Taxation Office (ATO) has announced that both the concessional and non-concessional contribution caps will be raised from 1 July 2024, following the release of the latest average weekly ordinary time earnings (AWOTE) figure.

The concessional contribution cap will increase from $27,500 to $30,000, while the non-concessional contribution cap will rise from $110,000 to $120,000.

The latest figures from the Australian Bureau of Statistics (ABS) show that the average weekly ordinary time earnings for full-time adults was $1,888.80 in November 2023. This represents a 4.5 per cent increase of $81 a week, the strongest growth since May 2013, excluding a brief spike early in the COVID-19 pandemic.

The increase in AWOTE has led to the indexing of the concessional contributions cap by $2500, resulting in the new cap of $30,000.

Key Takeaways:

Higher contribution caps paired with the latest stage 3 tax cuts could provide super fund members with some additional disposable income for super contributions.

The Non-concessional cap of $120,000 also gives rise to the possibility of doing a contribution of $360,000 under the bring forward provisions. Given this, it is important to consider whether to contribute in the current financial year or wait until 1 July.

Transfer balance cap will remain unchanged, the thresholds used to determine the maximum amount of bring-forward non-concessional contributions available to an individual will be adjusted accordingly.

If you are considering doing any contributions in this financial year or the next, or would like to discuss how these increased caps affect you, contact our office to arrange a meeting with one of our experienced Financial Advisers.

DisclaimerThe information in this article is general and does not take into account your particular circumstances. We recommend specific tax or legal advice be sought before any action is taken and refer to the relevant Product Disclosure Statement before investing in any product. Current as at 26/02/2024.