Case study: How the carry forward rule works

Let’s use a case study to see how the carry forward rule works.

Sarah and her employer have been making regular contributions to her super fund over the past few years, and her total super balance is $400,000 at 30 June 2026. Sarah also has unused caps from the previous five financial years, including one year (being 2022/23) where she took an extended period of maternity leave.

Here's a summary of Sarah’s situation:

Financial year starting 1 July	Concessional contributions paid into Sarah’s super account	Concessional contribution cap for that year	Unused cap amounts for that year	Total unused cap amounts that can be carried forward (cumulative)
2021	$15,000	$27,500	$12,500	$12,500
2022 (maternity leave)	$5,000	$27,500	$22,500	$35,000
2023	$15,000	$27,500	$12,500	$47,500
2024	$20,000	$30,000	$10,000	$57,500
2025	$20,000	$30,000	$10,000	$67,500

Based on the information above, Sarah’s personal concessional contribution cap for the financial year starting 1 July 2026 is $100,000. This is the annual concessional contribution cap of $32,500 for the year starting 1 July 2026, and $67,500 of unused cap amounts from the previous five financial years.

Now imagine Sarah receives an inheritance of $400,000. She chooses to use a large part of the inheritance to pay off her house mortgage, and puts part of it towards an overseas trip.

Sarah also chooses to put part of her inheritance towards her super balance. In fact, she contributes $80,000 of her inheritance into her super account – this is in addition to the $20,000 worth of SG contributions her employer makes on her behalf over the year. This means that by using the carry forward rule, Sarah can make concessional contributions worth $100,000 to her super account for the financial year starting 1 July 2026.

It’s important to understand that in practice, Sarah will contribute the $80,000 from her inheritance as a personal after-tax contribution, and then claim a tax deduction for the full amount. To claim the deduction, Sarah would need to give her super fund a valid notice of intent to claim a deduction and receive acknowledgement from the fund before claiming the deduction in her tax return.

How before-tax super contributions work