Treasurer Josh Frydenberg has released the Government’s second COVID Budget. Where COVID I was all about saving the economy, COVID II is all about continuing its momentum to secure its recovery. The key initiatives, outcomes, and potential opportunities are summarised here.
And as always, if you have any questions as to how this budget impacts you and your family, please do not hesitate to contact us. We are always up to date with such changes, so you don’t have to be.
We’ve summarised a number of the changes relating to superannuation below.
Unlocking Superannuation Opportunities for Older Australians
The work test
Effective July 1, 2022, significant changes are set to benefit Australians aged 67 to 74 in the realm of superannuation. Notably, individuals within this age bracket will no longer need to fulfill the work test to facilitate non-concessional contributions and salary sacrifice contributions to their superannuation accounts. The work test will remain applicable for those making personal deductible contributions to super.
What exactly is the work test? Essentially, it mandates that individuals must have been gainfully employed for a minimum of 40 hours within a 30-day consecutive period during the financial year of the contribution.
Downsizer Super Contributions
Downsizer super contributions, another noteworthy development, come into play from July 1, 2022. The age requirement has been lowered to 60 and above (previously 65 or older) to make use of this provision. This allows eligible individuals to contribute a maximum of $300,000 per member of a couple to their super, corresponding to the total proceeds from the sale of their home.
Superannuation for low-income earners
For those on the lower end of the income scale, there’s positive news as well. As of July 1, 2022, if you earn less than $450 per month in employment income, your employer is now mandated to make superannuation guarantee (SG) payments on your behalf. This change is expected to benefit approximately 300,000 additional individuals each month, with a noteworthy 63% of them being women, according to estimates from the Retirement Income Review.
In summary, the recent modifications to superannuation regulations present expanded opportunities and reduced barriers for older Australians, facilitating a more inclusive and flexible landscape for managing retirement savings.
READ THE BUDGET RECAP FOR 2021
Forrest Private Wealth – Perth Financial Planners
If you are having trouble with navigating your superannuation, we are here to help! Forrest Private Wealth is a Perth financial planner that will help make your retirement planning simpler and align your investment strategy to your financial plan. We work with you to make your short and long-term goals achievable.
We prioritise setting aside time now to better your future. Forrest Private Wealth gets to know you on a personal level to make informed decisions on what options are right for you. Book a virtual coffee today and start your journey to a better future.