Australia's Superannuation Caps Set to Rise: What You Need to Know February 7th, 2026

Inflation Numbers Point to Higher Super Limits

The December quarter CPI figure came in much hotter than expected at an annual rate of 3.8 percent, and the other key measure used in super, Average Weekly Ordinary Time Earnings, will be released later this month.

CPI is used to increase the Transfer Balance Cap and AWOTE, the superannuation contribution caps. The December CPI figure and other indicative wage data all but confirms that all superannuation limits are set to rise on July 1.

Concessional Contribution Cap: $30,000 to $32,500

The concessional contribution cap is increased in $2,500 increments when the AWOTE figure increases to a point where the next level is reached. The last increase from $27,500 to $30,000 occurred on July 1, 2024. With this likely increase, the concessional contribution cap could lift from $30,000 to $32,500.

Concessional contributions are those contributions where someone gains a tax concession, usually because of a tax deduction. This figure includes the compulsory employer contributions, salary sacrifice arrangements and personal contributions you might claim as a tax deduction yourself. Bear in mind that all concessional contributions are subject to a contributions tax of at least 15 percent and in some cases, 30 percent when income exceeds $250,000 per annum.

Importantly and under the 5-year "carry over" concession, the maximum possible tax deductible contribution for a single payment to super could be as much as $175,000 after July 1.

Non-Concessional Contributions Also Rising

The new concessional contribution cap will flow through to the non-concessional contribution limits. This figure is tied to 4 times the concessional cap, so the current limit of $120,000 per annum would increase to $130,000 per annum. That would then flow through to the "bring forward" rule which allows someone to bring forward up to 3 years of non-concessional contributions. Currently at $360,000, that is likely to rise to $390,000 after July 1.

There is no change to the super downsizer limit which remains at $300,000 per person. Super downsizer contributions are available once you reach 55 years of age. Importantly, they do not count towards any contribution cap.

Theoretically, a couple with minimal superannuation who are in a position to max out all of the limits could make a single combined contribution to super with the proceeds of their home sale of a combined $1.73 million!

Transfer Balance Cap Increases to $2.1 Million

The other big increase that is now locked in thanks to CPI is the Transfer Balance Cap.

The TBC specifies the amount that can be transferred from an accumulation phase super account (the typical super fund you have while working) into a tax-free retirement phase account, typically an account-based pension. Once established, the TBC is set for life.

The current limit of $2 million will increase to $2.1 million from July 1, 2026.

Understanding Your Personal TBC

The TBC system commenced in 2017 and was set at $1.6 million, so that someone who commenced an ABP in that financial year still has the $1.6 million TBC. They cannot access the increased amounts that have applied since that date.

However, for someone who has not fully exploited their TBC, they will receive the proportional benefit of the increase since their TBC was set.

Let's say for example, someone established their TBC in 2018 by commencing an ABP with $800,000. $800,000 was 50 percent of the available TBC at the time. From July 1 when the TBC increases to $2.1 million, they can still access their unused 50 percent or $1.05 million.