Superannuation Changes from 1 July 2022
Changes are afoot for superannuation contributions from 1 July 2022. These include additional chances to contribute as well as being able to get more out to purchase a first home.
From 1 July 2022, there are several changes to superannuation laws that you may be able to take advantage of.
Changes to voluntary contributions
If you are aged between 67 and 74, you will be able to make voluntary contributions into your superannuation without needing to meet the work test. Before 1 July 2022, if you were over the age of 67 you were required to work in gainful employment for at least 40 hours over 30 consecutive days in order to make a voluntary contribution.
The work test is only applicable from 1 July 2022, if you intend to claim a tax deduction for a voluntary contribution.
Bring-forward of non-concessional contributions
From 1 July 2022, you may be able to bring-forward 3 years’ worth of non-concessional contributions up to the age of 75.
If you are 74 years of age on 1 July 2022, and have a total superannuation balance of less than $1.48 million, your non-concessional contribution limit is $330,000 using the bring-forward rule.
Downsizer contributions
If you are over the age of 60 and you sell your family home, you may be able to make a downsizer contribution of $300,000 per person. Before 1 July 2022, the age limit was 65.
Certain eligibility requirements apply, such as owning the main residence for 10 years and making the contribution within 90 days of settlement.
Superannuation guarantee
The superannuation guarantee rate will increase from 10% to 10.5% for earnings after 1 July 2022. This rate is legislated to consistently rise up to 12% for the 2025–26 income year.
Removal of the $450 Monthly Earnings Threshold
The $450 per month eligibility threshold has been removed for most workers.
This means employers will need to pay the superannuation guarantee contribution (SGC) on all ordinary earnings. Particularly if your business relies on a large pool of casual workers who earn less than $450 per month, you’ll notice the extra cost when it comes to paying SGC for the September quarter.
There are some exceptions to the rule – employees under 18 and domestic workers need to work more than 30 hours per week and earn more than $450 per month. Contractors deemed employees for superannuation contributions must earn more than $450 per month. There are different rules for international and temporary workers.
First home super saver scheme
From 1 July 2022, the maximum amount of contributions that can be released from your superannuation under the first home super saver scheme (FHSSS) will increase from $30,000 to $50,000. The increase will apply to withdrawal requests from 1 July 2022.
The yearly limit that an individual can apply to withdraw remains the same at $15,000 per year. To be eligible to access the FHSSS, these contributions must be voluntary contributions.
Any of these changes may greatly benefit your ability to grow your retirement savings, and we would be delighted to work with you in this matter.
