Federal Budget Superannuation Changes 2021/2022
With David Barker
REPEALING THE WORK TEST FOR VOLUNTARY CONTRIBUTIONS
From 1 July 2022, individuals aged 67 to 74 will no longer be required to meet the work test when making, or receiving, non-concessional superannuation contributions or salary sacrificed contributions.
These individuals will also be able to access the non-concessional bring forward arrangement, subject to meeting the relevant eligibility criteria.
Access to concessional personal deductible contributions for individuals aged 67 to 74 will still be subject to meeting the work test.
This measure is likely to take effect from 1st July 2022 after passing parliament.
David’s Comments:
This has been in the works for a few years in one shape or another. This targeted break is the logical step towards seeing the measure pass parliament.
This will remove many of the complexities around the current rules, providing wider access to superannuation savings.
This rule in conjunction with the below downsizer contributions will make a powerful tool in boosting retirement savings for self-funded retiree’s
.
EXTENDING ACCESS TO DOWNSIZER CONTRIBUTIONS
The government has opened up the eligibility age to access the downsizer contributions from 65 to 60 years of age.
This measure is likely have effect from 1st July 2022 after passing parliment.
This is to enable Australians greater capability to boost their retirement savings at the same time as retirement.
The downsizer contribution rules allow for a one-off post-tax contribution of $300,000 per person after selling the family home. Both members of a copule have access to the rules for the sale of the same house.
David’s Comments:
This will make for some very opportunistic contribution strategies for individuals looking to boost their retirements savings into the low tax superannuation scheme.Timing is key to make use of this strategy, as contributions need to be made in strict accordance with the rules.
If thinking of selling your house over this age, consideration should be made to the effectiveness of a strategy, and you should contact me to discuss
FIRST HOME SUPER SAVER SCHEME
The expansion of the already in place First Home Super Saver Scheme (FHSSS) to release from super $30,000 to $50,000.
Voluntary contributions made from 1 July 2017 up to the existing $15,000 annual limit count towards the total amount available for release.
This increase will likely apply from 1st July 2022 after passing parliament.
David’s Comments:
With the bank of Mum & Dad now the 10th largest mortgage lender in Australia, this is unlikely to have a large impact. There can however be some handy tax savings in using the scheme, however it would require some careful planning to ensure utilised effectively.
REMOVING THE $450 THRESHOLD FOR SUPERANNUATION GUARANTEE
The Government will scrap the current $450 per month limit on minimum income threshold for which employers do not have to pay superannuation guarantee.
This will likely apply from 1st July 2022 after passing parliament.
This is designed to provide more equity to the super system, and boost retirement savings for lower incomes.
David’s Comments
This can only be good news to help low income earners, many that are women working less hours due to family commitments.