The Treasury Laws Amendment Bill which implements the majority of changes proposed in the 2021-2022 Federal Budget has now passed both houses of Parliament. The following changes will apply from 1 July 2022.
Contribution Eligibility Age 67 – 74
Currently a member aged 67 – 74 must satisfy a work test (of 40 hours over 30 consecutive days) to make voluntary superannuation contributions.
From 1 July 2022 persons aged 67 – 74 will be able to make non-concessional contributions without the need to satisfy the work test.
Note persons wishing to claim a tax deduction for a personal superannuation contribution between age 67 – 74 will still need to satisfy the work test.
Increasing Access to the Bring Forward Rule
From 1 July 2022 persons aged 67 – 74 will also be able to utilise the bring forward rule for non-concessional contributions.
This change brings opportunities for members to contribute additional personal funds into superannuation of up to $330,000 per person or $660,000 per couple up to age 74.
It also provides the opportunity to implement re-contribution strategies, where by you change the taxation component within your superannuation fund in order to minimise any potential tax paid by beneficiaries.
Lowering the Downsizer Contribution Age
From 1 July 2022 the minimum age to make a downsizer contribution will reduce from age 65 to age 60.
The downsizer contribution allows each member of a couple to contribute up to $300,000 each into superannuation following the sale of their main residence. Note eligibility criteria applies.
Removing the $450 monthly Income Threshold for Superannuation Guarantee (SG) Purposes
Currently where an employee earns less than $450 in a calendar month, their employer is not required to pay superannuation guarantee (SG) on those earnings.
For SG quarters commencing 1 July 2022, this minimum SG threshold will be abolished and an employer will be required to pay SG on earnings less than $450 in a calendar month.
Increasing Maximum Release Amount Under First Home Save (FHSS) Scheme
Where a request for a FHSS Scheme determination is made to the commission on or after 1 July 2022, a member will be able to release up to $50,000 of eligible contributions (plus a deemed earnings rate) under the FHSS Scheme to purchase their first home. Currently the maximum release amount is $30,000 plus deemed earnings.
Note there is no change to the annual voluntary contribution limit which will remain at $15,000. This means that a member will need to make eligible contributions over at least 4 years to take maximum advantage of the scheme.
Please note that the above information has been provided as general information only.
There are limits on the amounts that you can contribute into superannuation as well as various rules and thresholds. Your personal circumstances should be reviewed before implementing any of the above.
Please contact Level One Financial Advisers should you wish for us to provide you with personal advice in relation to any of the above strategies.
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