From July 1, 2022, there are some important changes happening in the Superannuation world. Announced during the 2021-22 budget, these changes have now been legislated and come into effect from July 1, 2022. We’ve summarised the main points for you here:
Increased Super Guarantee Rate
Eligible workers will receive an additional 0.5% paid to their super, taking the super guarantee rate up to 10.5%. The super guarantee legislation states that this rate will continue to rise 0.5% each year, until it reaches 12% in 2025.
New Age Threshold For Down-sizers
Downsizer contribution eligibility has been lowered from age 65 to 60. This allows retirees to contribute up to $300,000 to their super following the sale of their home. Couples are eligible to contribute up to $300,000 each.
Important: Proceeds from the sale of a home that are transferred into a super account will be included in the asset test for the Age Pension. The principal place of residence will remain exempt from the asset test.
Abolishing the Work Test for People Aged Between 67 and 74
As of July 1 2022, the work test will be abolished for people aged between 67 and 74 – meaning they will no longer be required to be employed for at least 40 hours in a consecutive 30 day period before super contributions are accepted.
Existing contribution cap arrangement continue to apply, and you will need to meet the work test if you wish to make a tax deduction on your voluntary contributions.
Removal of $450 Monthly Income Threshold
Previously, workers must have earned at least $450 in a month to be entitled to employer super payments. From July 1 2022, this threshold will be removed. This means that workers will be entitled to super payments, regardless of how much they earn.
However, anyone under 18 years of age will still need to work more than 30 hours in a week to be entitled to be paid super. (Unless they are covered by a workplace agreement that states otherwise).
For more information on how any of these new changes affect you in your business, please do not hesitate to reach out to the friendly team at PTP.