Major Changes to Superannuation Are Now Law | Legalwise Seminars

Andrew Yee, Director at HLB Mann Judd, discusses the major changes to superannuation proposed in the May 2021 Federal Budget as they are now law. 

The major changes to superannuation proposed in the May 2021 Federal Budget are now law. These changes to apply from 1 July 2022, are as follows:

1. Removal of the work test for those aged 67 to 74
2. Extending the access to the 3 year bring-forward non-concessional contribution rule
3. Reducing the downsizer contribution age from 65 to 60
4. Increasing the release amount under First Home Super Saver (FHSS) Scheme to $50,000
5. Abolishing the $450 monthly income threshold for Superannuation Guarantee (SG) purposes

Removal of the contributions work test

Under the new rules, a person from age 67 to 74 no longer needs to meet a work test to make voluntary (non-concessional, or after tax and salary sacrifice) superannuation contributions.

However if a person age 67 to 74 wishes to claim a tax deduction for a voluntary personal superannuation contribution after 1 July 2022, they would still need to meet a work test.

Extending access to the 3 year bring-forward non-concessional contribution forward rule

Those over age 67 and under age 75 will be able to access the 3 year bring forward non-concessional (after-tax) contribution rule. As long as a member is under age 75 on 1 July of the financial year the contribution is made, they are eligible to trigger the bring-forward rule, provided they do not breach their total superannuation balance cap which is currently $1.7 million.

Reducing the downsizer contribution age from 65 to 60

The age in which a person is eligible to make a downsizer contribution to superannuation will be reduced from 65 to 60. The other tests that currently apply to making a downsizer contribution will still apply.

Increasing the release amount under First Home Super Saver (FHSS) Scheme to $50,000

A person will be able to release up to $50,000 (plus a deemed earnings) of eligible contributions under the First Home Super Saver (FHSS) Scheme to purchase their first home.  The current maximum release amount is $30,000 plus deemed earnings.

Abolishing the $450 monthly income threshold for Superannuation Guarantee (SG) purposes

The current minimum superannuation guarantee (SG) threshold of $450 per month will be abolished and employers will be required to pay SG to employees earning less than $450 a month.

Federal Budget of 2022-2023

Note in the Federal Budget of 29 March 2022, there were major changes to superannuation announced, except the temporary 50% reduction in minimum pension payments introduced as a result of the economic effects of Covid-19 will be extended to apply for the 2022-2023 year.

Andrew heads the Self Managed Superannuation team in Sydney. He joined HLB Mann Judd Sydney in 2001 from the Australian Taxation Office in which he held senior roles in the areas of Income Tax, SME Audit, GST and Superannuation. Andrew’s expertise lies in Superannuation. He provides advice to superannuation funds with a focus on SMSFs and high net wealth investors in the areas of taxation, retirement planning, audit and regulatory compliance. He is one of the “Top Gun” specialists in HLB network and widely recognised as one of the foremost advisors on SMSFs in Australia. Not only is able to provide high level technical advice, but also able to tailor that advice on a practical and commercial level. Andrew has that “peripheral vision” that is rare amongst advisers these days. He is able to see things and anticipate scenarios and then provide outcomes that are in the best interests of his clients. You can speak with Andrew on LinkedIn .