Budget 2021-22 – changes impacting super
This year’s Budget included a number of superannuation-related announcements. Some of the more significant measures are outlined below.
- Employer super contributions – currently, if an individual earns less than $450 per month an employer does not have to pay Superannuation Guarantee contributions for them. The Government has announced it will remove this $450 per month minimum income threshold.
- Work test changes – currently, a ‘work test’ prevents individuals aged 67-74 from making voluntary contributions (both concessional and non-concessional) to their super if they have not worked at least 40 hours over a 30-day period in the financial year. The Government will amend the law to remove this test for those aged 67-74 (inclusive), for voluntary contributions where the individual does not claim a tax deduction.
- Downsizer contributions – the Government will reduce the eligibility age to make ‘downsizer’ contributions into super from 65 to 60 years of age. The downsizer contribution allows people to make a one-off, post-tax contribution to their super of up to $300,000 per person from the proceeds of selling their home.
- First Home Super Saver Scheme – the Government will increase the maximum amount of voluntary super contributions that an individual can withdraw from their super to help them purchase their first home (subject to conditions), from $30,000 to $50,000.
- Legacy products - the Government will allow individuals to exit out of some older, ‘legacy’ superannuation income stream products and set up a working group to look at how to transfer policyholders from closed life insurance products and managed investment scheme products to new products.
Most of these measures are intended to apply from 1 July 2022, but all the Budget announcements are yet to be legislated and details - including commencement dates - could change. For more details on the Budget, click here.