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Super contribution caps and NCC opportunities in 2023/24
Article published on: 23-02-2023
While recent AWOTE figures indicate the concessional contribution (CC) and non-concessional contribution (NCC) caps won’t change in 2023/24, indexation of the transfer balance cap may still create NCC opportunities for clients with higher super balances.
CC and NCC caps
The Australian Bureau of Statistics has released the AWOTE figures for the December 2022 quarter. Based on this figure and calculation of contribution cap indexation, it’s expected the annual CC and NCC caps will remain at $27,500 and $110,000 respectively in 2023/24.
Note: Key superannuation rates and thresholds for 2023/24 have not been formally confirmed by the ATO. It is important that advice recommendations are only made after the formal announcements.
TSB thresholds and NCC eligibility for higher super balance clients
The expected increase in the general transfer balance cap (TBC) to $1.9m will potentially extend eligibility to make NCCs in 2023/24, including utilising the:
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bring-forward rule
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Government co-contribution, and
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spouse contribution tax offset.
The NCC bring forward rules are based on the general TBC reduced by a multiple of the NCC cap. Total superannuation balance (TSB) thresholds that impact NCC eligibility are linked to the general TBC.
Where the TSB is greater than the general TBC reduced by one times the NCC cap, the bring forward rules do not apply. The standard NCC cap applies. The NCC bring forward is available if the TSB is less than the general TBC reduced by the amount of the NCC cap.
The current (2022/23) and expected (2023/24) NCC caps and thresholds are shown in the tables below.
Current NCC cap and thresholds
TSB at 30 June 2022
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NCC Cap for 2022/23
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$1.7m +
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$0
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$1.59m < $1.7m
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$110,000
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$1.48m < $1.59m
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$220,000
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< $1.48m
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$330,000
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Expected NCC cap and thresholds in 2023/24
TSB at 30 June 2023
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NCC Cap for 2023/24
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$1.9m +
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$0
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$1.79m < $1.9m
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$110,000
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$1.68m < $1.79m
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$220,000
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< $1.68m
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$330,000
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NCC advice opportunities and considerations
If the general TBC (and subsequently the NCC TSB thresholds) indexes to $1.9m on 1 July 2023 as expected, it is important to check eligibility to make NCCs including clients who:
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were previously ineligible to make NCCs as their TSB exceeded $1.7m but may be below $1.9m on 30 June 2023
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are within an existing bring-forward period in 2023/24, but were previously ineligible to use their remaining NCC cap space due to their TSB exceeding $1.7m, or
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are looking to access the Government co-contribution or the spouse contribution tax offset.
How do I help a client track their TSB?
An individual’s TSB is managed by the ATO in response to super fund reporting. An individual can track this information through their MyGov account via a linked ATO online services account, and can download relevant summaries to help with the provision of financial advice.
ATO online services displays information about a client’s TSB as at the prior 30 June, which includes:
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accumulation account balances
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retirement phase income stream balances
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outstanding balance of a Limited Recourse Borrowing Arrangement (LRBA) (for SMSF members who have borrowed to invest since 1/7/2018, if the LRBA is with a related party or the member has satisfied a full condition of release)
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in transit rollovers, less
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amounts contributed to superannuation as structured settlements.
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