Proposed superannuation changes in the 2021/22 Federal Budget
The 2021/22 Federal Budget announced some measures that directly impact super, including those outlined below.
Please note: all the measures below are proposed to take effect from 1 July 2022 pending the approval of the changes in Parliament.
Removing the work test for making super contributions
People aged 67 to 74 will no longer need to meet the work test to make non-concessional (after-tax) or salary sacrifice contributions to super, subject to existing contribution caps.
Currently, people aged 67 to 74 can only make voluntary contributions (both concessional and non-concessional) to their super or receive contributions from their spouse, if they’ve worked at least 40 hours over 30 consecutive days in the financial year, unless they meet an exemption.
The work test will still need to be met for people who wish to make personal deductible contributions to super.
Removing the $450 per month income threshold for Superannuation Guarantee (SG)
The Government intends to remove the minimum income threshold of $450 per month. This means that all employees will receive SG contributions. The SG rate will increase to 10% from 1 July 2021 (up from the current rate of 9.5%) and then gradually to 12% by 2025.
Reducing the eligibility age to make downsizer contributions from age 65 to 60
The Government has proposed that anyone 60 years of age or older will be eligible to make a downsizer contribution to super. The downsizer contribution allows people to make a one-off after-tax contribution to super of up to $300,000 from the proceeds of selling their home they have held for at least 10 years.
All other eligibility rules will remain unchanged.
Increasing the maximum releasable amount to $50,000 under the First Home Super Saver Scheme (FHSSS)
Under the FHSSS, a person can apply to have up to $30,000 of their eligible voluntary contributions (plus a deemed earnings amount) released from super to purchase their first home. The Government is proposing to increase the maximum releasable amount from $30,000 to $50,000.