The majority of the superannuation changes proposed in the 2021 Federal budget are likely to be passed.
The changes will most likely apply from 1 July 2022.
To summarise, these changes are as follows:
Removal of the $450 per month threshold for compulsory employer super contributions
Currently, if an employee, over the age of 18, earns less than $450 in a calendar month, their employer is not required to make super contributions on their behalf.
The proposed change will remove this threshold, and require employers to pay super for all employees, over the age of 18, irrespective of their monthly earnings.
Reducing the minimum age at which downsizer contributions can be made from 65 to 60
Currently, if you’re aged 65 years or older you may be eligible to contribute up to $300,000 into super from the sale proceeds of your home. This contribution is called the downsizer contribution.
Downsizer contributions do not impact on any other contribution caps.
The proposed change will decrease the age of eligibility from 65 to 60.
Removing the work test for individuals aged from 67 to 74 for non-concessional and salary sacrifice super contributions
Currently, individuals aged 67 years or older must pass a ‘work test’ in order to make contributions into their super fund.
The proposed change will increase the age of individuals eligible to contribute from 67 to 74 for non-concessional and salary sacrificed super contributions.
Increasing the age for bring forward contributions from 66 to 74
Currently individuals who are 67 years old or less may be eligible to bring forward their non-concessional contribution cap from the following two years. That is, they may be eligible to contribute three times the current year cap.
The proposed change increases the eligibility for individuals to access the bring forward rule from 66 to 74 years old.
If you have any queries regarding the above, or anything else for that matter, please do not hesitate to contact me at shannon@cortexaccounting.com.au or on 08 8372 7838.