Getting a windfall into super: how to stack the contribution caps in a single year

When a pre-retiree or retiree comes into a one-off windfall — selling a business, an investment property or the family home, an inheritance, a large bonus, or simply savings built up outside super — they often want to move as much as possible into the concessionally taxed superannuation environment, where earnings are taxed at just 15% in accumulation phase and 0% in a retirement-phase pension, with pension payments tax-free from age 60. The contribution caps limit how much can go in each year, but the encouraging part is that several avenues can be combined — "stacked" — in the same financial year. The components are the annual concessional contributions (CC) cap plus any carry-forward of unused CC cap from the prior five years; the non-concessional contributions (NCC) cap plus the bring-forward of up to three years' worth; the downsizer contribution from selling a qualifying home; and the CGT cap for certain small business sale proceeds. Because the downsizer and the CGT cap sit outside the CC and NCC caps, they stack on top, and each member of a couple has their own caps — so an eligible couple could in principle contribute well over a million dollars in a single year. But eligibility for each turns on age, the work test, total super balance and the source of funds, and the sequence and timing matter, which makes this a planning exercise best modelled well before the money arrives.

Why move a windfall into super at all?

The driver is the tax environment. Super fund earnings are taxed at 15% in accumulation and 0% in a retirement-phase pension, against marginal rates of up to 47% on investment earnings held in your own name, and from age 60 retirement-phase pension payments are tax-free. So shifting a large sum from personal ownership into super — and ultimately into a retirement-phase pension, within the transfer balance cap — can substantially cut the tax on that capital's earnings for the rest of your life. A one-off windfall is the moment to make that shift, and because the caps limit annual contributions, combining the avenues is how you maximise the amount moved in a single year.

How does the concessional contributions carry-forward work?

The annual CC cap is $30,000 for 2025-26 and covers employer contributions, salary sacrifice and personal deductible contributions. On top of that, you can use carry-forward of unused CC cap from the previous five financial years — but only if your total super balance (TSB) at the prior 30 June was below $500,000. That lets someone with several years of unused cap make a large personal deductible contribution in one year, and here is the powerful pairing: in a year with a big capital gain, a large deductible contribution offsets the gain — reducing the taxable income from the sale while moving money into super. That dual benefit makes the carry-forward CC the strategic centrepiece of a windfall year — subject, if you're aged 67 to 74, to meeting the work test (40 hours of paid work in 30 consecutive days) to claim the deduction, and to lodging a valid notice of intent.

How does the non-concessional bring-forward work?

The annual NCC cap is $120,000 for 2025-26, for after-tax contributions on which no deduction is claimed. If you're under 75, you can bring forward up to three times the annual cap — up to $360,000 — in a single year, subject to your total super balance. The bring-forward amount you can access shrinks as your TSB approaches the general transfer balance cap, and once your TSB reaches that cap — $2 million for 2025-26 — your NCC cap is nil and you can't make non-concessional contributions at all. So the NCC bring-forward is most available to those with smaller existing balances and tapers away for the already well-funded — but for a windfall recipient with room, it's a major avenue, up to $360,000 each in one year.

How does the downsizer contribution fit in?

The downsizer is a separate avenue that stacks on top of the caps. From the sale of a qualifying main residence generally owned for at least 10 years, a person aged 55 or older at the time of the contribution can contribute up to $300,000 each — $600,000 for a couple — and it must be made within 90 days of receiving the proceeds, usually settlement. Crucially, it doesn't count toward the CC or NCC caps and there's no work test, and it can be made regardless of total super balance — though once in, it counts toward your TSB and toward the transfer balance cap when you start a pension. For a retiree selling and downsizing the family home, it's a powerful way to move a large sum into super outside the normal caps.

What is the CGT cap, and who can use it?

The fourth avenue is for retiring small business owners. There is a lifetime CGT cap — $1,865,000 for 2025-26 — for contributing certain small business CGT concession amounts to super, namely proceeds sheltered by the 15-year exemption and the retirement exemption. Like the downsizer, CGT-cap contributions sit outside the CC and NCC caps, so they stack. Accessing it requires meeting the small business CGT concession conditions (covered in detail elsewhere) and lodging the right election with the fund at or before the time of the contribution. For a business owner whose sale qualifies, the CGT cap can move a very large amount into super, well beyond the standard caps.

What constraints limit how much can actually be stacked?

Put together, an eligible person could in one year contribute the CC cap plus carry-forward, the NCC bring-forward, the downsizer, and — for a qualifying small business sale — the CGT cap, with both members of a couple each using their own caps, roughly doubling the total. In principle that's well over a million dollars. But that's the upper bound, and most people have only some of the avenues — a downsizer but no business, an inheritance but no qualifying CGT cap — so the planning task is to identify which genuinely apply, not to assume the full theoretical stack. The main limiter is the total super balance: it gates carry-forward CC eligibility (TSB must be under $500,000) and shrinks the NCC bring-forward to nil once TSB hits $2 million. The transfer balance cap then limits how much can ultimately sit in the tax-free retirement-phase pension — anything beyond it stays in accumulation, taxed at 15% on earnings, still good but not zero. There are age and timing windows too: the downsizer's 90 days, the NCC bring-forward only under 75, the work test for deductible contributions at 67 to 74, and the notice of intent for CC deductions before you lodge your return or start a pension. There is also a proposed extra tax on the earnings attributable to very large balances above $3 million (often called Division 296) — its design and start date have been revised since first announced, so its current status should be confirmed before relying on it. And because TSB is measured at the prior 30 June, the starting position drives eligibility, so the sequence and timing of contributions genuinely matter.

Worked examples

These two cases show the stacking in action. They are illustrative only and not personal advice.

Geoff, 63, sells his small business for a gain that qualifies for the small business 15-year exemption, and he also has $250,000 in personal savings, a modest super balance of $300,000, and several years of unused concessional cap, while still working part-time in the wind-down. On these facts Geoff has a strong stacking opportunity. He can use the CGT cap — up to $1,865,000 lifetime (2025-26) — to contribute the 15-year-exemption proceeds outside the normal caps; he can use carry-forward CC, since his $300,000 TSB is under the $500,000 threshold, to make a large personal deductible contribution that also offsets the taxable income the sale created; and he can use the NCC bring-forward, up to $360,000 with his TSB well under $2 million, to contribute from his $250,000 of savings. On these facts the rational approach is to model the combined total, sequence the steps (the notice of intent for the CC deduction, the CGT-cap election to the fund), deliberately pair the carry-forward CC with the business-sale gain, and watch the transfer balance cap for how much can ultimately reach a tax-free pension, with the rest staying in accumulation. Geoff is the rare client with most avenues available.

Margaret and Bill, both 68, sell their family home of 25 years and downsize, netting $700,000 beyond the cost of the new home, with moderate existing super balances. On these facts the downsizer is the headline avenue: each can contribute up to $300,000 — $600,000 combined — outside the normal caps, with no work test, within 90 days of settlement. The remaining $100,000 can go in as non-concessional contributions, drawing on their annual NCC cap (and the bring-forward if needed, subject to their balances). With no business sale there's no CGT cap, but if either has unused carry-forward CC and taxable income to offset, a personal deductible contribution could be added, subject to the work test at their age and a TSB under $500,000. On these facts it is rational to prioritise the $600,000 downsizer within the 90-day window, top up with non-concessional contributions for the balance, and check the transfer balance cap for how much can move into a tax-free pension. Theirs is the downsizer-led version of the stack, common for downsizing retirees.

For pre-retirees and retirees with a one-off windfall, combining the avenues to maximise what goes into super in a single year is a high-value, advanced exercise. The work is to identify the windfall and the genuinely available avenues, check eligibility for each against age, the work test, total super balance and the transfer balance cap, model the combined total for the person and the couple, sequence and time the contributions correctly, pair carry-forward CC with any capital gain to offset it, consider whether spreading across two financial years beats cramming everything into one, watch how much can reach a tax-free pension, and lodge the required notices and elections. The headline — that an eligible couple could contribute over a million dollars in a year — is real but rarely fully available; the genuine value is in working out, for this client and this windfall, exactly how much can go in, through which avenues, in what order, and how much will ultimately enjoy the tax-free pension environment rather than the still-concessional accumulation phase.

Sources

• ATO — Contributions caps (key super rates and thresholds)
• ATO — Non-concessional contributions cap
• ATO — Concessional contributions cap
• ATO — Downsizer super contributions