Super policy reform
SUPERANNUATION GUARANTEE, PERFORMANCE TESTING AND SINGLE DEFAULT ACCOUNTS
The legislated superannuation guarantee increase of 0.5% to 10% will apply from 1 July 2021. Annual performance testing of funds via APRA’s ‘heatmap’ will also come into effect on 1 July 2021.
The Your Future Your Super measure requirement to staple individuals to their current superannuation fund, including new entrants to the workforce, will now take affect from 1 November 2021.
NEW THRESHOLDS ON 1 JULY 2021 FOR SOME EXISTING MEASURES
Thresholds for a number of existing super measures will increase from 1 July 2021.
These include increases to the amount individuals can voluntarily contribute to super through either salary sacrifice or by making a non-concessional contribution.
The key super rates and thresholds provide that for 2021/22:
- the concessional contributions cap is $27,500, up from $25,000
- the non-concessional contributions cap is $110,000, up from $100,000
- the general transfer balance cap is $1.7 million, up from $1.6 million
A number of changes and reforms relevant to superannuation were announced by Treasurer Josh Frydenberg in the 2021/22 Federal Budget.
Importantly, each of the announced changes below are proposed to commence from 1 July 2022 and need to be legislated before they take effect and therefore give rise to no changes in the near term.
The key superannuation changes announced in the Federal Budget are:
- Scrapping the $450 per month earnings threshold for workers to be eligible for the superannuation guarantee
- Expanding the First Home Super Saver Scheme (FHSS) to increase the maximum withdrawal from $30,000 to $50,000
- Extending eligibility for the downsizer scheme to individuals aged 60 — from the previous age of 65 — allowing people to make a one-off post tax contribution to their super worth up to $300,000 after selling their home
- Repealing the work test for voluntary non-concessional and salary sacrificed contributions to super for those aged 67 to 74 years. Individuals aged 67 to 74 years will still have to meet the work test to make personal deductible contributions. The current work test requires Australians aged 67 to 74 to work for 40 hours within 30 consecutive days during a financial year to make voluntary contributions to their super (both concessional and non-concessional).