On 10 February 2022, the Treasury Law Amendment (Enhancing Superannuation Outcomes for Australians and Helping Australian Businesses invest) Bill 2021 passed and has since been given royal assent, and passed into law.
The Bill gives effect to the following superannuation changes effective 1 July 2022:
- Removing the work test requirement for certain personal contributions for people aged between 67 and 75*. These contributions include non-concessional contributions, spouse contributions, contributions made under small business CGT provision, transfers from foreign super funds, salary sacrifice contributions.
- It is important to note that people aged between 67 and 75 still need to meet the work test requirement to be able to make personal deductible contributions.
- Extending eligibility to make non-concessional contributions under the bring forward provision to people aged between 67 and less than 75 at the start of the financial year.
- Reducing eligibility age for downsizer contributions from age 65 to age 60 at the time of making the contribution.
- Increasing the maximum release amount from $30,00 to $50,000 under the First Home Super Saver Scheme.
- Removing the $450 per month income threshold for superannuation guarantee contributions.
- Providing choice to SMSF Trustee on their preferred method of calculating exempt current pension income where members have both accumulation and pension benefits for part, but not all, of the year’s income.
* The contribution must be received no later than within 28 days after the month in which the person turns 75.
NOT included in this Bill
The Federal Budget proposal to relax residency requirements for SMSF members and an amnesty for legacy pension products were not included in this Bill and are yet to be legislated.
This change may open opportunities for older Australians including:
- Cash-out recontribution strategies
- Ability to make non-concessional contributions post age 67 without having to meet the work test
- Making downsizer contributions from age 60
- Releasing up to $50,000 of previously made personal contributions from super to buy a first home.
Call us to find out more about how you could potentially benefit from these changes, or what actions may need to be assessed prior to 1 July 2022.