As expected, this year’s Federal Budget has a strong emphasis on job growth and women’s security. From an SMSF perspective, there were some welcome surprises for SMSF trustees, as outlined below.
All measures outlined below, are expected to commence from 1 July 2022, once they have received Royal Assent.
Repealing the work test for voluntary contributions
Individuals aged 67 to 74 (inclusive) will be able to make non-concessional (including under the bring-forward rule) or salary sacrifice contributions without meeting the work test, subject to existing contribution caps and existing total superannuation balance limits.
This measure will simplify the rules regarding super contributions and will increase flexibility for older Australians to save for their retirement through super.
Reducing the eligibility age for downsizer contributions
The eligibility age to make downsizer contributions into superannuation will be reduced from 65 to 60 years of age. All other eligibility criteria remains unchanged, allowing individuals to make a one-off, post-tax contribution to their superannuation of up to $300,000, per person, from the proceeds of selling their home. These contributions do not count towards your non-concessional contribution caps.
This measure will allow more older Australians to consider downsizing to a home that better suits their needs.
Removing the $450 per month threshold for superannuation guarantee eligibility
The Government will remove the current $450 per month minimum income threshold, under which employees do not have to be paid the superannuation guarantee by their employer.
First Home Super Saver Scheme
The Government has announced that it will increase the maximum releasable amount of voluntary concessional and non-concessional contributions under the First Home Super Saver Scheme (FHSSS) from $30,000 to $50,000.
There is no proposal to change the $15,000 per annum restriction – hence those wishing to access the full $50,000 would need to build up their voluntary super over several years.
The Government have also indicated a number of technical changes will be made to the FHSSS legislation.
Relaxing residency requirements for SMSF’s
SMSF’s and small APRA funds will have relaxed residency requirements through the extension of the central management and control test safe harbour from two to five years. The active member test will also be removed, allowing members who are temporarily absent to continue to contribute to their SMSF.
The information contained in this email is intended for general information only, contains general advice and does not take into account your individual investment objectives, financial circumstances or needs. Information provided on and available from this site does not constitute financial, taxation or other professional advice and should not be relied upon as such. It has been prepared based on the current taxation and superannuation laws. Before you make any financial decision, we recommend that you seek professional advice from a suitably qualified professional.
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