Earlier this month, the Morrison Government introduced the Treasury Laws Amendment (Enhancing Superannuation Outcomes for Australians and Helping Australian Businesses Invest) Bill 2021 into parliament. The bill will see the implementation of several budget measures that impact superannuation.
In this article, George Karavias, BlueRock’s Director of Private Clients & SMSF, highlights the superannuation changes that will impact Australians as a result of this bill, and what they might mean for you.
Superannuation Changes 2021 Budget Update 1: Exempt Current Pension Income Flexibility
When determining an individual’s exempt current pension income for any income year where a fund has both segregated and unsegregated periods, a trustee is provided with the choice of using their own preferred exempt current pension income calculation method.
This option will be effective from the 2021-2022 income years.
Superannuation Changes 2021 Budget Update 2: Removal of the Work Test for Certain Super Contributors
This budget update has removed the work test for individuals aged between 67 and 75 years of age, subject to existing contribution caps, for:
- Non-concessional contributions (including the bring forward rule)
- Salary sacrifice contributions
It’s important to note that the work test will continue to apply to personal deductible contributions.
Superannuation Changes 2021 Budget Update 3: Reduction in the Eligible Age
This measure has reduced the eligible age for an individual to make a downsizer contribution from the proceeds of the sale of their home from 65 to 60. This will enable older Australians to downsize to a smaller property that better suits their needs, opening up the availability of larger homes for larger families.
This measure will be applied to downsizer contributions that are made on or after 1 July 2022.
Superannuation Changes 2021 Budget Update 4: First Home Saver Super Scheme Increase
The eligible amount to be released from the First Home Saver Super Scheme (FHSSS) has been increased from $30,000 to $50,000; however, no change applies to the limit on both voluntary concessional and non-concessional contributions in any one financial year that can be released ($15,000).
This measure will be applied to requests that are made after 1 July 2022.
Superannuation Changes 2021 Budget Update 5: Threshold Removed
The $450 Super Guarantee threshold for an employee earning salary or wages has been removed. This measure is set to commence from 1 July 2022.
Superannuation Changes 2021 Budget Update 6: Stapled Super Funds for New Employees
From 1 November 2021, if a new employee doesn’t select a superannuation fund of their choice, their employers will need to request the employee's stapled super fund details from the ATO in order to comply with the rules of the chosen superannuation fund. Failing to provide this information could result in penalties from the ATO.
To further discuss how these superannuation changes may impact you and your superannuation investment strategy, please get in contact with one of our Melbourne SMSF accountants for a free consultation today. Our superannuation accountants work closely with our other BlueRock advisory divisions to provide a holistic view on your goals and investment strategies.