Further changes to Superannuation Rules and extension of Temporary Full Expensing of Depreciating Assets

Existing Law

New Law from 1 July 2022

A member of a superannuation fund aged 67 to 74 must satisfy a work test to make voluntary concessional (deductible) and non-concessional (non deductible) superannuation contributions. The work test must be satisfied prior to the contribution being made.

The work test will only apply to concessional superannuation contributions. The work test must be satisfied in the year the contribution is made. Non-concessional contributions do not require the satisfaction of a work test.

A member of a superannuation fund must be under age 67 at the start of a financial year in order to trigger the non-concessional contributions cap bring-forward rule in a particular year. This rules allows a non-concessional contribution of up to $330,000 (i.e. $110,000 for the current year and the “bringing forward” of the next 2 years $110,000 cap to the current year).

The ability to use the bring forward rule is subject to the member not exceeding their total super balance cap (currently either $1.6m or $1.7m).

The maximum age will increase so that a member can trigger the bring-forward rule in a financial year where they are under age 75 at the start of the year.

The ability to use the bring forward rule remains subject to the member not exceeding their total super balance cap (currently either $1.6m or $1.7m).

The minimum age to make a downsizer contribution (measured at the time of contribution) is 65.

The minimum age to make a downsizer contribution is reduced to 60.

First Home Super Saver Scheme allows a member of a superannuation fund, who is a first home buyer, to apply to the Commissioner for approval to access up to $30,000 plus deemed earnings, of voluntary contributions they have made to their superannuation fund. These voluntary contributions can be up to $15,000 in a year.

The amount that can be accessed increases to $50,000.

The voluntary contribution limit of $15,000 does not change meaning that  a member will need to make eligible contributions over at least four years to take maximum advantage of the scheme.

An employee must earn at least $450 in a calendar month before their employer is  required to pay superannuation guarantee (SG) on those earnings.

There is no earnings threshold after which superannuation guarantee (SG) is payable. SG is payable on all amounts paid to employees regardless of the amount.

SMSFs that moved from being partially or fully in accumulation phase to being fully in retirement phase part way through a financial year have to use the segregated pension assets approach to calculate its exempt income for that part of the income year that the fund is in pension phase (requiring an actuarial certificate to be obtained to determine exempt pension income).

From the 2021-22 financial year, SMSFs that have all assets fully supporting the payment of retirement phase income streams for only part of a financial year can choose to either treat all of those assets as segregated pension assets for that part of the year (the current methodology) or treat all of those assets as not being segregated pension assets for that part of the year (meaning the calculation of exempt pension income can be based on a pro-rata calculation rather than an actuarial certificate).