Opportunities with Super changes commencing 1 July 2022

Several recent legislative changes to super will commence on 1 July 2022. It may be a good opportunity to check whether you can take advantage of any.

Changes to the work test rules

Aged between 67 and 75[1]?

From 1 July 2022, you’ll be able to make non-concessional contributions to your super, without having to meet the work test. The work test will only be required if you wish to claim a tax deduction for your personal contribution.

Bring-forward arrangements extended

The bring-forward rules are designed so you can contribute to your super early. Your total 3-year non-concessional contribution cap ($110,000 per year) can be contributed over a shorter period, either all at once or as several larger contributions.

This bring forward arrangement will be available if you’re under 75 at the start of the financial year in which you’re contributing. As an example, you’d need to be aged 74 or younger on 1 July 2022 to be eligible to take advantage of the full bring-forward amount in the 2022/23 Financial Year. If eligible, you’ll be able to contribute up to $330,000 to superannuation in a single financial year.

The maximum you can contribute will also depend on your Total Superannuation Balance (TSB) being below $1.48m on 30 June 2022. If your TSB on 30 June 2022 happens to be between $1.48 and $1.7 million, the available cap will reduce as follows:

TSB on 30 June 2022 Non-concessional cap amount
< $1.48 million$330,000
$1.48 million to < $1.59 million$220,000
$1.59 million to < $1.7 million$110,000
$1.7 million and above$0

Non-concessional contributions if you’re turning 75 in June 2022

If you’re turning 75 in June 2022, there will be a small window of opportunity for you to make a non-concessional contribution of up to $110,000 between 1 July and 28 July 2022, subject to your TSB being below $1.7m on 30 June 2022.

This is because superannuation funds can accept personal contributions even after your 75th birthday, provided the contribution is made no later than 28 days after the end of the month in which you turn 75. This means if you turn 75 in June 2022, you would have until 28 July 2022 to contribute to your super.

Downsizer contribution eligibility age reduced

If you have reached the eligible age, and meet the eligibility criteria[2], you may be able to contribute up to $300,000 from the proceeds of the sale (or part sale) of your home into your superannuation fund.

From 1 July 2022, the eligible age is 60 years old or older. Prior to this, you needed to be 65 or older at the time of contribution.

Changes to Superannuation Guarantee contributions

For those still working, the minimum monthly income threshold of $450 that is currently applied to Superannuation Guarantee (SG) contributions will be abolished from 1 July 2022. In addition, the rate of SG will increase from 10% to 10.5% of ordinary time earnings.

Increasing the First Home Super Saver maximum releasable amount

If you’re looking to purchase your first home, the maximum amount of voluntary contributions that can be released from super to purchase your first home will increase from $30,000 to $50,000 on 1 July 2022.

If you have any questions or would like to find out more about anything superannuation related, give us a call.

[1] Amounts contributed must be received no later than 28 days after the end of month in which you turn 75.

[2] https://www.ato.gov.au/Individuals/Super/In-detail/Growing-your-super/Downsizer-contributions-for-individuals/

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