Late last year the government introduced legislation titled “Enhancing Superannuation outcomes for Australians and helping Australian Businesses invest” which is expected to come into effect on 1st July 2022. The changes are positive with one of the key aims of the legislation being to increase the flexibility of Superannuation as well as reduce costs.
The key changes included in the legislation are:
- Increasing the maximum amount that members can voluntarily contribute for the First Home Save Scheme from $30K to $50K
- Reducing the age that Members can make downsize contributions to Super from age 60 (previous 65)
- Removing the work test for Members making non-concessional contributions between ages 67 and 75 (note Members will still need to meet the work test for personal concessional contributions from ages 67 and 75)
- Allowing members to access the bring-forward rule for non-concessional contributions from age 67 to 75 (subject to the usual caps)
- Allowing Trustees to use their preferred method of calculating exempt current pension income (ECPI) including the proportional method.
The legislative changes also include:
- Removing the $450 a month threshold before an employee’s salary counts towards a superannuation guarantee
- And extending the full expensing and write off of assets for businesses with a turnover of less than $5 billion revenue
It is particularly pleasing to see the removal of the work test for contributions. This will open up the possibility for growing superannuation balances, as well as reducing the taxable balances within member accounts for estate planning purposes.
The information provided should not be considered personal financial advice as it is intended to provide general advice only. The content has been prepared without taking into account your personal objectives, financial situations or needs. You should seek personal financial advice before making any financial or investment decisions.