As the new financial year approaches, there are several key super changes that may impact your ability to contribute to your superannuation. It’s important that you’re aware of the changes so that you can take advantage of these opportunities to make the most of your nest egg.
Superannuation Guarantee (SG) increase
The compulsory Super Guarantee (SG) paid by your employer will increase from 10% to 10.5%. This is in line with the government’s plan to increase SG each year until it reaches 12% from 1 July 2025 onwards.
$450 threshold scrapped
Currently, for an employer to be obliged to pay super, the employee needs to be earning at least $450 per month. This will change in the new financial year, where employees will be eligible for the super guarantee (SG) regardless of how much they earn.
Work test requirements scrapped
Under the current ‘work test’ rules, people aged between 67 and 74 can only make voluntary contributions to super if they have been employed for 40 hours over a consecutive 30-day period. As of 1 July, this will no longer apply for voluntary non-concessional contributions. The work test will still apply for personal tax-deductible contributions.
Bring-forward rule extension
The bring-forward rule allows you to make up to three years’ worth of non-concessional contributions in a single financial year, up to a maximum of $330,00.
Under the current bring-forward rules, you must be aged under 67 to take advantage of this rule. As of 1 July 2022, this cut-off age will increase to 75, allowing people in their early 70s to commence a bring-forward arrangement.
The downsizer contribution allows you to make a contribution into your superannuation of up to $300,000 from the proceeds of selling your home. The eligibility age will reduce from 65 to 60 (note, there is no upper age limit). There are a number of other eligibility requirements so make sure you do your research and are aware before jumping in.
First Home Super Saver Scheme (FHSSS)
First Home Super Saver Scheme (FHSSS) allows people to save for a house deposit inside their super funds. As it currently stands, the maximum amount which can be released is $30,000. This will increase to $50,000 on July 1st.