Federal Budget Summary – Superannuation related Changes
Removing the work test for voluntary contributions
Individuals aged 67 to 74 years (inclusive) will be allowed to make or receive non-concessional contributions (including bring forward contributions) and make salary sacrificed contributions without having to meet the work test.
The work test will still have to be met in order to make personal deductible contributions.
Removing the work test requirement will provide more flexibility for older Australians to save for their retirement through super.
This measure will take effect from the first tax year after it receives Royal Assent – expected to be 1 July 2022.
Reducing the age limit for downsizer contributions
The age limit for which downsizer contributions to super can be made will reduce from 65 to 60 years of age – allowing those eligible to contribute to their fund up to $300,000 after-tax per person following disposal of an eligible dwelling.
This measure will take effect from the first tax year after it receives Royal Assent – expected to be 1 July 2022.
Removing the $450 per month threshold for super guarantee payments
The current $450 per month minimum income threshold will be removed meaning more employees will now be entitled to receive mandated contributions (generally 9.5% of your gross pay) from their employers.
This measure will take effect from the first tax year after it receives Royal Assent – expected to be 1 July 2022.
Other changes affecting superannuation
These measures will take effect from the first tax year after they receive Royal Assent – expected to be 1 July 2022.
- Relaxed residency requirements for SMSFs – SMSF members and small APRA fund members will be able to contribute to their super fund whilst temporarily overseas..
- Exiting legacy retirement products – temporary option to convert underlying capital and reserves into more flexible and contemporary retirement products.
- First Home Super Saver (FHSS) scheme changes – the maximum releasable amount will increase from $30,000 to $50,000.
Please Note: Many of the comments in this publication are general in nature and anyone intending to apply the information to practical circumstances should seek professional advice to independently verify their interpretation and the information’s applicability to their particular circumstances
