Carry-forward contribution rules: How to catch up if you’re behind

It’s likely that your superannuation contributions vary from year to year. Maybe you’ve changed jobs, had a prosperous year in business or taken some time out of the workforce. Whatever the case, it can mean that your concessional contribution cap isn’t always fully utilised. This is what the carry-forward contribution rules were designed to address. Eligible individuals can catch up on unused concessional caps from prior years and potentially boost retirement savings in a tax-effective way.

But it’s not quite as simple. There are rules, eligibility requirements you must meet and other planning considerations to take into account. 

What are carry-forward contribution rules?

There is a limit on the amount of concessional (before-tax) contributions that can be made to super in a single financial year. These typically include employer super guarantee contributions, salary sacrifice contributions and personal deductible contributions.

If you don’t use the full concessional cap in a given year, the unused portion may be carried forward for up to five years. This means that, subject to eligibility, you may be able to contribute more than the standard annual cap in a future year by using some or all of those previously unused amounts.

In simple terms, think of it as a rolling five-year window. Each year that you don’t fully use your concessional cap creates an amount that may be available to use later, provided you meet the relevant conditions at the time you choose to contribute.

Who may be eligible?

Carry-forward concessional contributions are not universal. One of the key eligibility criteria is your total super balance. To access unused concessional caps, your total super balance must be below a specified threshold – currently $500,000 – at the previous 30 June.

Income and employment circumstances can also influence how and when the strategy may be used. For example, individuals who have had fluctuating income, taken time out of the workforce or sold a business or asset may find that carry-forward contributions become relevant in later years.

Common situations where the rules may apply include:

• professionals whose income increases later in their career
• business owners with irregular cash flow or a large one-off income year
• individuals returning to work after parental leave or a career break
• pre-retirees looking to strengthen retirement savings in the final years of employment.

While the rules can be helpful, eligibility needs to be reviewed carefully each year, as both balance thresholds and contribution caps can change.

Why catching up can matter

If you qualify, using carry-forward contributions can be a way to strengthen your retirement savings in a tax-effective manner. Concessional contributions are generally taxed at a lower rate within super than many marginal tax rates, which can improve after-tax outcomes over time.

From a planning perspective, the rules can provide flexibility. Rather than contributing the maximum each year regardless of circumstances, you may have the option to make larger contributions in years when cash flow allows or when marginal tax rates are higher. 

For pre-retirees, in particular, the ability to make additional concessional contributions in the later stages of their working life can help align retirement savings with long-term goals. However, this doesn’t mean unused caps should automatically be used simply because they are available.

Practical considerations and limitations

While the concept is straightforward, the timing and structure of contributions require careful attention. Key considerations include:

• cash flow and liquidity needs, particularly if you’re considering a large contribution
• interaction with other superannuation caps and rules
• potential tax implications if contribution limits are exceeded
• the timing of contributions relative to income, bonuses or asset sales.

It’s also important to remember that unused concessional caps expire after five years. This is why it’s important to review this regularly as part of an ongoing strategy.

Planning ahead rather than rushing

Carry-forward contributions are most effective when they are part of a coordinated, long-term plan rather than a last-minute decision. Superannuation strategies rarely exist in isolation. They interact with broader considerations such as investment structures, tax planning, estate planning and lifestyle goals.

Making large additional contributions without considering these factors can create unintended outcomes, including liquidity constraints or compliance issues. A forward-planned approach allows contributions to be timed and structured in a way that supports both short-term needs and long-term objectives.

How Apt approaches contribution strategies

At Apt, superannuation contribution strategies are considered within the context of each client’s broader financial plan. Rather than focusing solely on maximising contributions in a single year, the emphasis is on aligning contributions with long-term goals, tax efficiency and lifestyle needs.

This may involve:

• reviewing unused concessional caps and eligibility each year
• coordinating contributions with income and cash-flow planning
• balancing super contributions with other investment and wealth strategies
• ensuring decisions support both current lifestyle and future retirement outcomes.

By taking a structured, advice-led approach, contribution strategies can be integrated into a broader plan designed to provide clarity and confidence across all stages of life.

Get in touch to speak with an Apt adviser about a holistic approach to your financial future.

General Advice Warning

The information provided in this blog does not constitute financial product advice or a recommendation to purchase a particular product. The information is of a general nature only and does not take into account your individual objectives, financial situation or needs. It should not be used, relied upon, or treated as a substitute for specific professional advice. Apt Wealth Partners Pty Ltd is not a registered Tax Agent. You should consider your individual situation and seek tax advice from a registered tax agent before making any decision based on the content of this document. Apt Wealth Partners (AFSL and ACL 436121 ABN 49 159 583 847) recommends that you obtain professional advice before making any decision in relation to your particular requirements or circumstances.