Recent legislative reforms introduced by the Government will reduce complexity and make it easier for Australians to contribute to their superannuation. In particular, there are significant measures to assist older Australians wanting to top up their superannuation savings for retirement.
The superannuation changes include:
- Removing the work test for individuals aged 67 to 74 in relation to non-concessional and salary sacrificed contributions. With the scrapping of the work test from 1 July 2022, individuals aged 67 to 74 will be able to contribute to their superannuation regardless of their working status.
- Availability of the ‘bring-forward’ rule to individuals under the age of 75 (rather than 67, as is currently the case), effectively extending the eligibility to make non-concessional contributions.
- Reducing the eligibility age for making downsizer contributions from 65 to 60, from 1 July 2022. The downsizer scheme allows individuals or couples to make a one-off contribution into superannuation of up to $300,000 (or $300,000 each for a couple) from the sale of the family home, providing it has been lived in for a minimum of 10 years.
- Removing the $450 monthly super guarantee threshold, thus allowing those on lower incomes to receive superannuation guarantee contributions from their employer regardless of how much is earned each week. This measure applies from 1 July, 2022.
- Increasing the first home super saver scheme releasable amount from $30,000 to $50,000. Individuals will be able to make requests for release on or after 1 July 2022.
The changes are designed to simplify the superannuation rules and may present planning opportunities for some clients. There will be further consideration of the changes in relation to your circumstances during the tax planning process conducted in May and June.