Changes to Super In 2022 That You Need to Know About
Changes to Super are coming in 2022 and they are going to cause shockwaves for those keen enough to take notice. The Australian government has announced multiple plans to implement drastic changes to existing Super systems, such as the downsizer scheme and infamous work test. As always, these changes will occur after the 21-22 EOFY during June. But the magnitude of these changes mean that many Australian people, and indeed businesses, will most likely be scrambling to find their footing once these changes take place. Therefore, it’s best to start preparing for these changes now. Below are the top Super changes coming in 2022.
No More Work Test
The work test for Super contributions will soon be abolished! This means that individuals aged 67 to 75 years will no longer have to qualify in order to make salary sacrifice contributions to their chosen Super. Previously, in order to do this, individual would have to prove that they had worked a minimum of 40 hours in the last 30 days. All retirees over the age of 67 will be able to make these contributions to top up their Super account after July, provided their total Super is less than $1.7 million.
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Bigger Super Home Saver Fund
As of this EOFY, the First Home Super Saver Scheme will be expanded; great news if you’re thinking of entering the property market this year. The First Home Super Saver Scheme allows Australian workers to save for their first property purchase inside their own Super, via voluntary concessional and non-concessional contributions. The maximum amount of voluntary contributions per financial year is $15,00, and the maximum withdrawal from the fund was $30,000, but will now increase to $50,000 after July 1st 2022. As always, conditions apply: namely, anyone applying for the scheme must be 18 years or older & never have owned property before.
$450 Threshold For Super Contributions Is Being Removed
From July 1st, 2022, employers will now need to pay the Super guarantee to employees who earn less than $450 a month. The $450 a month threshold previously meant that employees did not need to pay this Super guarantee. In the case of workers under the age of 18, they will still need to work more than 30 hours a week, unless otherwise stated in a workplace agreement, in order to qualify for their employer’s Super guarantee.
Downsizer Scheme Goes Super-Sized
A downsizer contribution affords older Australian citizens a high degree of financial flexibility in their Super contributions. This scheme achieves such flexibility by allowing citizens over the age of 65 to make a one-off contribution of up to $300,000 to their Super from the sale of a family home. From July 1st, this age bracket will lower to just 60 years of age; this change is the Australian government’s attempt to increase the supply of family homes, by encouraging existing mature-aged home-owners to downsize sooner. Of course, conditions apply: you must have lived in the home for a minimum of 10 years. This is one of the more immediately accessible opportunities garnered from 2022’s Super changes. If you are considering taking advantage of the lowered age bracket, remember that change of ownership must occur in a 90 day window from the Super change, in order to qualify for the contribution this year.
There’s no way around it: 2022 is going to be a huge year for Australian Super. But oftentimes, change can be exactly what is needed to shake things up and provide new opportunities. There are other, minor changes coming to 2022 as well, and more uncertain plans from the Australian government concerning the future; however, these 4 changes can be planned for and acted upon right now. If you want to get the jump on Super & potentially save yourself head and cash later on this year, then talk to our financial experts today. We’re offering a free 30 minute consultation for all Super-related inquiries!
