The start of the 2022-23 financial year has signalled a number of key changes to superannuation in Australia, including an adjustment to the Superannuation Guarantee, expansion of the downsizer scheme, and changes to the ‘work test’.
Here’s what some of the main changes, from 1 July 2022, look like:
Removal of the $450 per month income threshold for super contributions: This legislation removed the $450 per month income threshold that employees needed to earn to be paid the Superannuation Guarantee (SG) by their employer.
Expansion of the First Home Super Saver Scheme: The First Home Super Saver Scheme (FHSSS) allows for voluntary contributions to be saved in super and then later released to purchase a first home. Before 1 July 2022, an individual could contribute up to $15,000 of eligible contributions (in any one financial year) under the scheme and have up to $30,000 in total (across all years) released for the purchase of a first home. From 1 July 2022, the releasable amount of eligible contributions increased to $50,000, however the contribution limit of $15,000 in any one financial year remains the same.
Expansion of the Downsizer Scheme: From 1 July 2022, the age at which retirees can downsize their family home and be able to contribute $300,000 to superannuation ($600,000 for couples) changed from 65 to 60 years. Other existing requirements will continue to apply. Find out more about downsizer contributions.
Extension of the temporary reduction in superannuation minimum drawdown rates: The Australian Government specifies the minimum amount that needs to be drawn each year from account-based pensions and similar products, including superannuation income accounts. The annual minimum payment was halved by the Government in March 2020 in response to COVID-19. That minimum drawdown measure has been extended to 30 June 2023.
Removal of the work test for people aged 67 to 74: From 1 July 2022, the work test for personal (non-concessional) and salary sacrifice contributions to super for those aged 67 to 74 has been removed. Existing annual concessional and non-concessional caps will continue to apply, although the change will allow people under age 75 to use the non-concessional bring-forward rule (which currently ceases at age 67). People aged 67 to 74 will still need to meet the work test if they want to claim a tax deduction for their super contribution.
Superannuation Guarantee increases: The Superannuation Guarantee (SG) is the minimum legislated amount of superannuation an employer must pay an eligible employee. The SG rate has now risen from 10% per year to 10.5% of a person’s ordinary-time earnings (different arrangements apply for Norfolk Island).