What Happens to Your Concessional Super Cap When You Leave the Public Sector

The concessional contribution cap for 2025-26 is $30,000 per financial year. It counts everything that goes into super pre-tax: employer Super Guarantee, salary sacrifice, personal deductible contributions, and — critically for public-sector employees — the notional taxed contribution (NTC) calculated for any defined benefit interest you hold.

When you leave the public service, the cap doesn't reset and your contributions don't disappear. What happens depends on whether you were in:

• An accumulation fund (PSSap, ESSSuper Accumulation Plan, QSuper Accumulation, etc.) — straightforward, contributions count year-by-year.
• A defined benefit interest (CSS, PSS, MSBS, ESSS Defined Benefit, SASS, SSS, QSuper Defined Benefit) — the NTC is recalculated proportionally to the date you ceased contributing service.

If you've under-used your cap in earlier years, you can also carry forward unused cap for up to five years — useful if a redundancy or termination payment puts you over the cap in your exit year.

Authoritative sources: ATO — Concessional contributions cap, ATO — Defined benefit contributions.

Defined benefit super doesn't have actual fortnightly contributions in the same sense as accumulation. Instead, the actuarial value of the additional retirement benefit you accrue each year is calculated by the fund and reported to the ATO as a notional taxed contribution (NTC).

For most public sector defined benefit funds, the NTC for a given member is calculated using a formula that takes into account the member's salary, contribution rate, accruing benefit multiple, and a notional contribution factor set by the fund's actuary.

The NTC counts toward your $30,000 concessional cap, alongside SG and salary sacrifice. So if you're in PSS at a 10% member contribution rate on a $130,000 salary with a calculated NTC of $24,000, your remaining headroom for any additional salary sacrifice or personal deductible contribution is just $6,000 for the year.

Special rule — grandfathered defined benefit members: If you were a member of a defined benefit fund at 12 May 2009 and have remained continuously in the same scheme, your NTC is capped at the concessional cap amount regardless of the actuarial calculation. Excess NTC above the cap is "ignored" — no excess contributions tax applies. This protects most long-term PSS, CSS, MSBS, SASS and SSS members from being penalised for the actuarial generosity of their scheme.

If you started after 12 May 2009 or have switched schemes since, the grandfathering doesn't apply and the NTC counts at full value against the cap.

Your defined benefit accrual stops on the day your contributing service ends. The NTC for the year of exit is calculated proportionally — for the days you were a contributing member, not the full year. So if you exit the public sector on 31 December 2026 (mid-financial year), your NTC for 2026-27 is roughly half the annual figure.

What this means for your concessional cap in the exit year:

• Half-year NTC (proportional).
• Plus any SG and salary sacrifice from the public sector role up to the exit date.
• Plus any SG and salary sacrifice from a new private sector role from the exit date onwards.

If you carry an accumulation balance with the same fund (e.g. PSS members who also have a small accumulation interest, or post-2005 members of some schemes), that interest behaves the same as any private accumulation fund after exit — you can keep contributing if eligible, you can roll out, you can leave it.

If your defined benefit interest is preserved (you've stopped contributing but not yet retired), the NTC drops to nil. The benefit will continue to grow according to the scheme's preservation rules, but no NTC reporting occurs after the cessation date.

Since 2019-20, if your total super balance at the previous 30 June is below $500,000, you can carry forward unused concessional cap from up to five prior financial years, in addition to the current year's cap. This is the carry-forward unused concessional contributions (CFUC) rule.

Example: you were in PSS for 15 years, made average NTC of $25,000 per year against the $27,500 (2022-23), $27,500 (2023-24), $30,000 (2024-25), and $30,000 (2025-26) caps. Unused capacity: $2,500 + $2,500 + $5,000 + $5,000 = $15,000 (just the last four years matter; 2021-22 cap of $27,500 also applies if relevant).

If your total super balance at 30 June 2025 was below $500,000, you can use that $15,000 of unused cap in 2025-26 (or later years until it expires). Combined with the standard $30,000, you could make up to $45,000 of concessional contributions this year without breaching the cap.

Useful exit-year scenario: take a redundancy or termination payment that includes a tax-deductible component, claim a personal deductible super contribution to mop up the unused cap, reduce your taxable income materially in the year you've otherwise been pushed up a bracket.

Check your CFUC balance via myGov → ATO → Super → Information.

1. Get the NTC calculation in writing from your scheme as soon as you've accepted the new role. Most public sector schemes will provide a member benefit statement or estimate on request. You need this to know your remaining concessional headroom.
2. Pull your CFUC balance from myGov. If you have unused cap, that's tax-deductible super contribution headroom that doesn't depend on your new employer.
3. Plan your salary sacrifice in the new role around the cap. If the public sector NTC has used $20,000 of your cap by 31 December and your new private sector SG will add another $7,500 by 30 June, you have about $2,500 of room for salary sacrifice in the new role for the rest of the year.
4. Use the personal deductible contribution channel (notice of intent to claim a deduction, NAT 71121) for any one-off contributions. This is more flexible than salary sacrifice because you can decide the amount after you know your final NTC for the year.
5. Don't roll out of a defined benefit fund without advice. Public sector defined benefit pensions are valuable. Rolling out converts the entitlement to a lump sum, which is usually worth less than the lifetime pension. Get specific financial advice from someone licensed in defined benefit super before any rollover.

What if I exceed my concessional cap in the exit year?
Excess concessional contributions are added to your assessable income and taxed at your marginal rate, with a credit for the 15% contributions tax already paid by the fund. There's also an excess concessional contributions charge (interest-style component) calculated by the ATO. You can elect to withdraw 85% of the excess to soften the cash impact.

Do unused-cap contributions still count toward the bring-forward non-concessional cap?
No — they're separate caps. The $30,000 concessional cap and the $120,000 non-concessional cap (with bring-forward up to $360,000 over three years) are independent.

If I rejoin the public sector later, does my old NTC start accumulating again?
If you rejoin the same defined benefit scheme and re-establish contributing membership, NTC reporting resumes. If the scheme is closed to new members (most are), you'd join the open accumulation plan instead, with normal SG-and-sacrifice mechanics.

Does the grandfathering survive a fund merger?
Generally yes, provided the merger doesn't trigger a substantive change in your benefit entitlements. Confirm with the fund — every merger has its own treatment determined under the SIS Regulations.

Where can I check what my NTC was last year?
Your fund issues an annual member statement showing your NTC. The ATO also receives this data; you can check it via myGov → ATO → Super → Information → contribution history.