It may have taken a while, but at last, the super changes announced in the May 2021 budget have passed through parliament and received Royal Assent. Below we have summarised these changes and what it means for you.

Please note all these changes below take effect from 1 July 2022.

Superannuation Guarantee changes

Super guarantee is now payable to all employees. These changes remove the previous rules allowing employers to forgo paying super guarantee to employees earning less than $450 per calendar month.

Downsizer contribution eligibility

Previously you had to be 65 or older, and met the eligibility requirements to be able to utilize the downsizer contribution measures.

The age for this will be reduced to 60 from 1 July 2022.

This measure allows you to contribute up to $300,000 into super from the proceeds of the sale of your home. Assuming you have met all the eligibility requirements.

First Home Saver Scheme

Under this scheme, the maximum amount of super that could be released over multiple financial years has now been increased from $30,000 to $50,000. The amount of voluntary contributions you can make to put towards this measure remains at $15,000 per annum. So if you’re looking to get to the full $50,000 you will need to plan this out over a 4 year period.

Removal of ‘work test’

There is now no requirement to meet the work test if you are younger than 75 and looking to make these contributions to super:

  • Salary sacrifice contributions
  • Non-concessional contributions [no tax deduction]
    • However, you will still need to ensure your total super balance is below the cap to make non-concessional contributions to super. For the 2022/2023 financial year, your individual total super balance cap must be below $1.7 million on 30 June 2022 to make non-concessional contributions to super.
  • Previously, you could trigger the bring forward non-concessional contribution rule [where you can bring forward two years’ worth of contributions] if you were under age 67, however, this will now be extended to under age 75, subject to your total super balance.
  • If you intend to make personal concessional contributions [to claim a deduction in your personal tax return] you will still need to meet the work test of 40 hours in a 30 day period if you are between age 67 to 74. This seems to be a bit of a disadvantage for those who are self-employed – however, please reach out to us to discuss your options.

As with everything super related, the rules can be quite complex and we do recommend you seek personalised advice before making any decisions. If you are looking to explore any of the above changes further, please do not hesitate to reach out to Megan Kelly, one of our SMSF Accountants and an integral part of our Financial Planning Services team.

 

general advice disclaimer

Business Depot Financial Planning BNE Pty Ltd ABN 27 644 561 400 and its advisors are Authorised Representatives of Fortnum Private Wealth Ltd ABN 54 139 889 535 AFSL No. 357306.

The information provided on this website is a brief overview and does not constitute any type of advice. We endeavour to ensure that the information provided is accurate however information may become outdated as legislation, policies, regulations and other considerations constantly change. Individuals must not rely on this information to make a financial, investment or legal decision. Please consult with an appropriate professional before making any decision.