SUPER CHANGES
The recent Federal Budget made some significant changes to Superannuation all of which are designed to give people the opportunity to add more to the Superannuation fund.
These changes include:
- 'Work test' removed for those aged between 67 and 74 for superannuation contributions
- Lower age threshold for super downsizer scheme
- Removal of monthly income threshold of $450 for super contributions
- Increase the withdrawal limit for First Home Super Saver Scheme (FHSSS)
Contributions
From 1 July 2022 you will no longer be required to be employed for at least 40 hours in a consecutive 30-day period within the financial year, before any super contributions can be accepted. This applies to both concessional and non-concessional contributions.
When we combine these with previously announced measures that came into effect from 1 July 2021 of:
- Concessional (Deductible) contributions cap increased from $25,000 to $27,500.
- Non-concessional (Non-deductible) contributions cap increased from $100,000 to $110,000.
- General transfer balance cap increased from $1.6 million to $1.7 million.
- People with balances over the transfer balance cap (which is $1.7 million from 1 July 2021) will be eligible to make a downsizer contribution. However, the downsizer amount will count towards that cap when savings are converted to the retirement phase.
It will enable members of superannuation funds to better plan for their retirement.
Downsizer Age Threshold Decreased
Further the government will now allow people from the age of 60, down from 65, to contribute up to $300,000 to their super on the sale of their family home.
There are other tests that will need to be satisfied such as owning the home for a period of 10 years.
Interestingly, the $300,000 contribution is $300,000 per person, which means a couple could contribute up to a total of $600,000. These are all initiatives that should enable people to plan for their future and save funds for their retirement. Should you wish to discuss how best to access these incentives further please contact your Aspen Corporate Advisor.
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