New Super Rules Passing both Houses

On 10 February 2022, Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Bill 2021 passed both houses and will become law once the Governor General gives it Royal Assent. The Bill contained six measures, five of which were super related. We’ve summarised these measures below which will come into effect from 1 July 2022:

Superannuation Update 1: Changes to Income Threshold
The $450 income threshold for employees earning salary or wages will be removed. Employers will need to adjust their payroll systems to ensure that the $450 SG threshold is removed from 1 July 2022.

Superannuation Update 2: First Home Super Saver Scheme
The maximum amount of voluntary contributions made over multiple financial years that are eligible to be released under the First Home Super Saver Scheme has been increased from $30,000 to $50,000. Voluntary contributions made from 1 July 2017 up to the existing limit of $15,000 per year will count towards the total amount able to be released.

Superannuation Update 3: Reduction To Downsizer Contribution Age
Currently, individuals aged 65 and above can make a downsizer contribution to their superannuation plan from the proceeds of selling their home. The eligibility age for downsizer contributions will decrease from 65 to 60 from 1 July 2022.
The eligibility age is tested at the time the contribution is made to the superannuation fund and not the time their home is sold (contract date), or when settlement occurs.

Superannuation Update 4: Non-Concessional Contribution Rules
The reform of non-concessional contribution rules for super members aged between 65 and 75 has worked to not only remove the work test, but also extend the bring forward concessions. This means that individuals aged 67 to 74 years (inclusive) who were not previously able to bring forward non-concessional contributions due to their age may do so, starting in the 2022-23 financial year. It also presents an opportunity to effectively utilise an individual’s non-concessional cap in a future year where the member was over age 75 and the trustee would not generally be able to accept a personal contribution.

Superannuation Update 5: Exempt Current Pension Income
Trustees of funds with no disregarded small fund assets will be able to choose their preferred method of calculating exempt current pension income when they have member interests in both accumulation and retirement phases for part (but not all) of the relevant income year.

For more clarity on the above superannuation updates and an in-depth explanation of what they could mean for you and your individual superannuation investment strategy, please feel free to contact us.