Super changes coming 1 July 2022
The end of financial year is approaching, and as is often the case, this brings a number of changes for our industry. Here is a snapshot of some of the legislative changes coming on 1 July 2022.
An increase in the Super Guarantee rate
Workers who are eligible to receive the Superannuation Guarantee, can expect an increase from 10% to 10.5% as the rate increases each year up to 12% by 2025.
New age threshold for downsizers
The eligibility for downsizer contributions will be lowered from age 65 to 60, allowing retirees to contribute up to $300,000 to their super following the sale of their home. Couples will be eligible to contribute up to $300,000 each.
These contributions also do not count towards the non-concessional cap.
Abolishing the work test for people aged between 67 and 74
The current work test requires you to be employed for at least 40 hours in a consecutive 30-day period during the financial year. From 1 July 2022, this work test will be abolished.
From 1 July 2022, this work test will be abolished. Those under the age of 75 will be eligible to make voluntary personal contributions regardless of their employment status. The general concessional and non-concessional contribution caps will apply.
There will still be a requirement to meet the work test for anyone who wishes to claim a tax deduction on their voluntary contributions.
For those gainfully employed aged between 65 and 74, the rules relating to employer-paid super contributions will remain unchanged.
Removal of $450 monthly income threshold
As of 1 July 2022, the $450 minimum monthly income threshold for super guarantee payment eligibility will be removed.
This may increase superannuation contributions for up to 300,000 low-paid employees, ensuring they receive the mandatory superannuation guarantee.
Extension of the minimum pension drawdown
Retirees will be able to maintain the reduced minimum drawdown (at half rate) for the 2022-23 financial year. For example, someone aged between 65-74 with a standard minimum of 5%, can reduce their annual payment to 2.5%.
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