NCC lifetime cap and you - MGD
20 May 2016

By now you would be well aware of the multitude of proposed superannuation changes the Turnbull Government announced in the recent Federal Budget. While it is important to remember that these changes remain notional, pending election results and subsequent legislation, there is one change that will take immediate effect (if enacted) that has the potential to have a detrimental result on your retirement strategy if not carefully considered now.

From 3 May 2016, the amount of non-concessional contributions (NCCs) that a person can make to superannuation has a $500,000 lifetime cap. The ‘life-time’ nature of this measure proposes that non-concessional contributions made from as far back as 1 July 2007 are counted towards the proposed cap.

Considering that up until Budget night, those under 65 could contribute up to $540,000 over a rolling three-year period, the change has understandably caused a number of our clients concern and left them wondering what this really means for their long-term strategic planning.


I’ve already contributed over $500,000

As at Budget night (3 May 2016), if you had already made NCCs totalling $500,000 or more from 1 July 2007, you cannot make any further NCCs without potentially breaching the new caps.

You may be required to withdraw any excess NCCs made after 3 May 2016 if the proposed measures eventually become enacted in their present form. There may also be other penalties associated with exceeding the cap.


I’ve contributed less than $500,000

If you had contributed less than $500,000 as at Budget night, your NCCs will be capped at $500,000 in total. So, for example, if you had contributed $400,000 between 1 July 2007 and 3 May 2016, you can only contribute another $100,000 without being penalised.


My retirement strategy is dependent on continual NCCs

If you have a transition to retirement (TTR) or re-contribution strategy in place or a limited recourse borrowing arrangement (LRBA) that is dependent on your continual NCCs, then it may be prudent to reassess your retirement strategies now and plan for the possibility that these proposals will become reality.


Talk to your Adviser

If you have any NCC plans in place, whether you have or have not reached the $500,000 cap, we strongly encourage you to get in touch with your Adviser as soon as possible to ensure your retirement strategy remains an effective mechanism to achieve your financial goals. You can contact your MGD Wealth Adviser on (07) 3391 5055, or via email,


Disclaimer: This article contains general information only and is not intended to constitute financial product advice. Any information provided or conclusions made, whether express or implied, do not take into account the investment objectives, financial situation and particular needs of an investor. It should not be relied upon as a substitute for professional advice.