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Increase in super contributions sparked by 1 July changes

Voluntary contributions to superannuation are on the increase ahead of the 1 July changes.

Savvy investors are rushing to make voluntary contributions to their superannuation before the new rules come into effect on 1 July.

Voluntary contributions to FirstChoice Super rose sharply in November 2016, up 25 per cent on contributions made in October, and almost 20 per cent higher than the previous November.

Overall, contributions to FirstChoice across November and December 2016 rose more than 35 per cent on the prior two months of September and October.

This surge has come about as the Federal Government passed its proposed super reforms in November, which aim to make the superannuation system fairer and more sustainable.

“Many of our customers were waiting for the legislation to be passed because there was still some uncertainty. Some planners were also holding off advising clients until they knew it was enshrined in law,” says Peter Chun, General Manager Product and Investments.

“It is not a coincidence that since legislation was passed in November that we have seen this spike in contributions in both November and December, and we’re expecting that to continue up to 30 June.”

From 1 July 2017 a number of changes will come into effect which impact the amount of certain types of contributions that a person can make before extra tax applies.

Changes to the non-concessional (after-tax) contributions rules include a reduced annual non-concessional contributions cap, from $180,000 to $100,000, for people with a total super balance of less than $1.6m. Those with total super balances of $1.6m or more on 30 June 2017 will effectively no longer be able to make further non-concessional contributions in the 2017–18 financial year, potentially making 2016–17 their last opportunity to make post-tax contributions.

Find out more about the new rules and how they might affect you.

Make the most of the current rules

As the lower contributions caps don’t kick in until 1 July, now might be the time to consider making voluntary contributions to super if you’re in a position to do so.

“These are the largest changes to Australia’s super system in almost a decade and this spike in voluntary contributions reflects not only more confidence in the system, but a sentiment to act early and take advantage of this window before the new rules take effect,” says Mr Chun.

“The reduction in non-concessional contributions cap will have a major impact, making this next period an extremely valuable opportunity for people to increase their super before the June cut-off.”

It’s important to seek advice as the rules are complex and there are penalties if you go over the contributions caps.

That’s why you should speak to a financial adviser, who can review your situation and build a strategy to help you get the most out of your super.


Colonial First State Investments Limited ABN 98 002 348 352, AFS Licence 232468 (Colonial First State) is the issuer of super, pension and investment products. This document may include general advice but does not take into account your individual objectives, financial situation or needs. You should read the relevant Product Disclosure Statement (PDS) carefully and assess whether the information is appropriate for you and consider talking to a financial adviser before making an investment decision. A PDS for Colonial First State’s products are available at or by calling us on 13 13 36.