A new resident to Australia can use unused cap space when making concessional contributions.
Matthew Richardson, SMSF Manager for Accurium, explained in a recent webinar that unused concessional contributions can be taken into account when implementing strategies for new Australian residents.
Richardson gave the example of an individual who moved to Australia in 2025. They are 63 in 2026 and expect a taxable income of $235,000.
“The question is, what’s their cap in this year? They are a new resident to Australia. What does that mean?”
According to Richardson, even though the individual is a new resident, they can still consider the unused concessional contributions from the previous five years.
“Even if they weren’t a resident in Australia until 2025, you can still take into account those unused concessional contributions.”
In this scenario, the individual would have a $147,500 concessional contributions cap for the 2026 year. For someone new to Australia who may not yet have a large super balance, this strategy can be an effective way to contribute to super while reducing personal tax.
Richardson also highlighted that there are rules governing when a fund can accept contributions, which in turn affects whether a member can claim a deduction for personal contributions.
“That contribution does need to be in the fund, but what does that mean for the fund in terms of accepting a contribution?” he asked.
Under SIS Regulation 7.04, age-based rules apply:
- Under 55: All member contributions can be accepted.
- Between 55 and 74: Member contributions are generally accepted, with some differences for downsizer contributions.
- 75 and over: Personal member contributions are no longer accepted, except within 28 days after the end of the month in which the member turns 75.
Richardson noted that exceeding the contribution cap is a separate issue from whether the fund can accept the contribution.
“If a member makes a contribution and the fund accepts it, but the member has exceeded their cap, that’s a separate issue.”
He added that once the fund becomes aware a contribution exceeds the cap, it should be paid out within 30 days.
