With a Federal Election due to take place around March of this year, we can expect that superannuation will be a stormy topic between the two major parties. There are some important changes scheduled this year. Here’s what it means for you…

Superannuation Guarantee

The superannuation guarantee is legislated to increase to 10.5% from 1 July 2022.

Work Test

People aged 67 to 74 (inclusive) who wish to continue making contributions to superannuation currently have to pass a work test. This test, which requires a person to be gainfully employed for at least 40 hours during a 30-day period, is due to be scrapped from 1 July, 2022, although it is yet to be passed through parliament and with few sitting days scheduled ahead of the election, this has become less certain.

Self-Managed Super Funds (SMSF) – Downsizer payments

From 1 July, 2022, the minimum age that you can make a downsizer contribution will drop from 65 to 60. The downsizer scheme allows SMSF members nearing retirement to make a one-off contribution into your super of up to $300,000 (or $600,000 per couple) from the sale of the family home they have occupied continuously for 10 years. This does not count towards any concessional or non-concessional contributions caps of $25,000 per year.

SMSF – Residency Rules

Under the current rules for SMSF, contributions are prohibited from members who are overseas unless a complex active member test is satisfied. Proposed residency rule changes will allow SMSF members to continue to contribute to their SMSF while temporarily overseas.

Politics

Even if the legislation is introduced into parliament before the election is called, it will still be required to be re-introduced to the new parliament, and if there is a change in government, it could be scrapped altogether.

The Labor government typically promotes a tightening of the contribution caps and a lowering of the Division 293 income threshold for taxing super contributions.

With so much uncertainty on the horizon, it has never been more important to seek professional advice from a specialised superannuation or SMSF advisor. David and Christine are our resident SMSF specialists. To speak to them, contact 4320 0500.