Non-concessional contributions (NCCs) are an essential component of Australia’s superannuation system, allowing individuals to boost their retirement savings using after-tax contributions. Unlike concessional contributions, NCCs are not taxed upon entry into a super fund, making them a powerful strategy for those looking to maximise their super balance while staying within contribution limits.
What Are Non-Concessional Contributions (NCCs)?
NCCs are after-tax contributions made to a superannuation fund where the contributor does not claim a tax deduction. These contributions are included in the tax-free component of a member’s superannuation balance and can provide significant estate planning and tax benefits.
NCC Caps and Limits
For the 2023-24 financial year, the NCC cap is $110,000 per year, with the option to contribute up to $330,000 under the bring-forward rule (subject to total superannuation balance thresholds).
Who Can Make NCCs?
Individuals can make NCCs provided they meet the following criteria:
- They are under age 75.
- Their total superannuation balance (TSB) is below $1.9 million as of 30 June of the previous financial year.
- They are making contributions from personal after-tax income.
The Bring-Forward Rule
The bring-forward rule allows eligible individuals under age 75 to make up to three years’ worth of NCCs in a single year. The amount that can be contributed depends on the individual’s total superannuation balance:
| TSB at 30 June 2023 | Maximum NCC Cap | Bring-Forward Period |
| Less than $1.68m | $330,000 | 3 years |
| $1.68m – $1.79m | $220,000 | 2 years |
| $1.79m – $1.9m | $110,000 | 1 year |
| $1.9m or more | $0 | Not eligible |
NCC Strategies to Maximise Super Savings
- Targeting the Transfer Balance Cap: Contributing strategically to stay within the $1.9 million cap for retirement pensions.
- Cash-Out and Re-Contribution Strategy: Reducing taxable super balances to minimise death benefit tax.
- Centrelink Benefits Optimisation: Keeping assets in accumulation phase to reduce assessable income for means-tested pensions.
- Early Access to Tax-Free Benefits: Directing NCCs to a spouse nearing preservation age for earlier tax-free withdrawals.
Avoiding Excess NCCs and Penalties
Exceeding the NCC cap can result in tax penalties. To avoid this:
- Track prior-year contributions to avoid unintentionally triggering the bring-forward rule.
- Ensure NCCs do not exceed the allowed cap based on total super balance.
- Be mindful of excess concessional contributions, as these may count towards the NCC cap.
Final Thoughts
Non-concessional contributions are a valuable tool for Australians looking to optimise their retirement savings. By understanding the NCC rules, contribution caps, and available strategies, individuals can make informed financial decisions that align with their long-term superannuation and estate planning goals.