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The May 2021 Budget proposed changes to the Superannuation Regulations were passed by both houses of Parliament on 10 February 2022.

The following changes will come into effect on 01 July 2022:

Income threshold for Super Guarantee (SG) contributions removed and rate increased to 10.5%

Currently, employers are not required to make superannuation contributions for employees earning less than $450 per month.

From 01 July 2022, employers will be required to pay Superannuation Guarantee (SG) contributions for all employees regardless of their income at the increased rate of 10.5%.

You will need to check that your software is updated to correctly calculate your employees’ SG entitlement from 01 July 2022.

If the removal of the $450 threshold means you will be paying SG for one or more employees for the first time, you will need to provide your employee (s) with a Standard Choice Form.

Removing the work test requirements

From 01 July 2022, the work test will be removed for those aged between 67 to 74, for any personal and salary sacrificed contributions made.

Currently, if you are within this age bracket and you want to make voluntary super contributions, you  are required to meet a work test unless you are eligible for an exemption.

Note: In order to claim a deduction for these contributions, the work test will still need to be met.

Reducing the age eligibility for downsizer contributions

The downsizer contributions age eligibility will be lowered from age 65 to age 60.

A downsizer contribution allows eligible members to contribute up to $300,000 each to super from the sale of their family home. This legislation has reduced the minimum age to 60.

‘Bring forward’ arrangement on Non-Concessional Caps extended to those under age 75

The ‘Bring Forward’ arrangement currently allows those under the age of 67 to automatically gain access to future years’ caps, making extra contributions without incurring additional tax.

This arrangement will be extended to anyone under the age of 75.

For the 2021-22 year, members aged under 67 have an option to contribute up to $330,000 over a three-year period, depending on their total superannuation balance.

From 01 July 2022, members aged under 75 will have an option to contribute up to $330,000 over a three-year period, depending on their total superannuation balance.

Increase on voluntary contribution release under the First Home Super Saver Scheme

The First Home Super Saver Scheme (FHSS) currently allows first home buyers to release voluntary contribution amounts of up to $30,000 (plus associated earnings) to put towards the purchase of their first home.

Effective 01 July 2022, the new legislation increases the amount to $50,000 (plus associated earnings.)

How can we help?

With the ongoing changes to Superannuation Regulations, it can be difficult to understand the complexities and the impact on your personal circumstances and retirement goals.

Contact us today to discuss how these changes may affect you and how we can assist you to reach your goals and objectives at info@alkfinancialgroup.com.au or on 03 9808 7377.

 

Disclaimer

This information is provided by Arthur Kyriacou & Co. for educational purposes. It does not take into account your objectives, financial situation or needs and you should consider whether it is appropriate for you. While all care has been taken in the preparation of this material, no warranty is given in respect of the information provided and accordingly neither Arthur Kyriacou & Co nor its related entities, employees or agents shall be liable on any ground whatsoever with respect to decisions or actions taken as a result of you acting upon such information.