Among the announcements were some developments for superannuation and retirement-related proposals, most of which are changes to existing policies and measures.
|Remember, these Budget announcements are proposals only and shouldn’t be considered final until they are passed by the Federal Parliament.|
Pleasingly, the Budget’s economic forecasts suggest that the superannuation guarantee (SG) will increase from 9.5% to 10% from 1 July 2021, as previously legislated.
This will be the first of several increases scheduled to occur over the next four years, raising the SG to 12% by 2025.
From 1 July 2022, the government will remove the $450 minimum monthly income threshold for the superannuation guarantee.
The removal of the threshold will benefit an estimated 300,000 lower-paid workers, 63% of whom are women, who will now receive mandatory super contributions.
This is a welcome step to ensure more people in entry-level, part-time and casual jobs get a much-needed boost to their super savings.
The maximum you can save under the FHSS scheme is proposed to increase from $30,000 to $50,000 for individuals.
This scheme currently allows people to make voluntary super contributions and then withdraw them, plus any investment earnings, when they’re ready to buy their home.
From 1 July 2022, those approaching retirement will be able to make voluntary super contributions (including salary sacrifice or after-tax contributions) without having to meet the work test.
Under the current work test, people aged 67-74 must have worked at least 40 hours over 30 consecutive days during a financial year before either concessional or non-concessional contributions can be made.
The government will improve the Pension Loans Scheme by providing immediate access to lump sums of around $12,000 for individuals, and $18,000 for couples. It will also introduce a ‘no negative equity guarantee’ so borrowers will not have to repay more than the market value of their property.
From 1 July 2022, people aged over 60 will be able to contribute up to $300,000 (or ($600,000 for couples) from the sale of their home into their super. This downsizer contribution does not count towards the concessional and non-concessional contributions caps.
The scheme is currently available to those over age 65.
Read more about these measures for older Australians in the Federal Government’s Budget Fact Sheet (PDF)
From 1 July 2022, the Government will relax the residency requirements for self-managed superannuation funds (SMSFs).
This measure will allow SMSF members more flexibility to contribute to their super fund while temporarily overseas.
For more information on budget measures relating to businesses, visit the business section of the Federal Government’s Budget website.
For a comprehensive update on the budget and how it may impact you, visit the Federal Government Budget website.