The major Superannuation related measures announced in the Budget, includes the following:-
- Superannuation contributions work test to be repealed from 1 July 2022 As a result, individuals under age 75 will be allowed to make or receive non-concessional (that is non-tax deductible) or salary sacrifice contributions from 1 July 2022 without meeting the work test, subject to existing contribution limits. However, individuals aged 67 to 74 years will still have to meet the work test to make personal tax deductible contributions.
- SMSF residency requirements to be relaxed – The residency requirements for self-managed superannuation funds (SMSFs) and small APRA-regulated funds (SAFs) will be relaxed by extending the central management and control test safe harbour from 2 to 5 years for SMSFs, and removing the active member test for both fund types. The Government said the proposed changes to the residency requirements will allow SMSF and SAF members to continue to contribute to their superannuation fund whilst temporarily overseas, ensuring parity with members of large APRA-regulated funds. It will also provide SMSF and SAF members with flexibility to keep and continue to contribute to their preferred fund while undertaking overseas work and education
- Super Guarantee (Employee Super) $450 per month threshold to be removed – The Superannuation Guarantee $450 per month eligibility threshold will be removed from 1 July 2022. As a result, employers will be required to make quarterly Super Guarantee contributions on behalf of such low-income employees earning less than $450 per month (unless another Super Guarantee exemption applies).
- Super Guarantee (Employee Super): no change to legislated rate rise to 10% for 2021-22 –The Budget did not announce any change to the timing of the next Super Guarantee (Employee Super) rate increase. The rate is currently legislated to increase from 9.5% to 10% from 1 July 2021, and by 0.5% per year from 1 July 2022 until it reaches 12% from1 July 2025.
- Downsizer contributions eligibility age reduced to 60 –The proposed reduction in the eligibility age will mean that individuals aged 60 or over can make an additional non-tax deductible contribution of up to $300,000 from the proceeds of selling their home. Either the individual or their spouse must have owned the home for 10 years.
- First Home Super Scheme to be extended for withdrawals up to $50,000 The Budget confirmed that the maximum amount of voluntary superannuation contributions that can be released under the First Home Super Saver (FHSS) scheme will be increased from $30,000 to $50,000
Source: Tax & Super Australia – 2021 Federal Budget Report