Superannuation Changes - 2021/2022 Financial Year
With the end of this financial year fast approaching, we have attached the below to highlight some of the key changes coming into play in the 2021/2022 financial year.
Super Guarantee Percentage
Please note that the superannuation guarantee rate for employees is changing. The amount is increasing from 9.5% to 10% effective from 1st July 2021 and over the coming years will eventually increase to 12%.
We recommend that you review your processes and software to ensure that the correct percentage is being calculated from the start of the financial year. Whilst all software providers will be across of this and providing software updates to reflect this change, it is still the employer’s responsibility to ensure this is correct.
The below taxable shows the incoming changes over the next few financial years:
Super Contribution Caps – Increase
Effective form 1st July 2021 the superannuation concessional and non-concessional contribution caps will be indexed. The new caps will be:
This will also see the bring-forward rule for non-concessional contributions increase to $330,000 over a three year period. It is also important to note that if an individual enters into a bring forward arrangement before 1 July 2021, they will not have access to any additional cap space as a result of the increase to the non-concessional cap.
We recommend that any employers/employees who currently have salary sacrifice arrangements in place, to review and adjust these arrangements if and where required.
Minimum Pension Payment Rates
Originally the minimum pension drawdown rates were meant to revert back to the original rates, however on 29th May 2021 the Government announced that the temporary 50% reduction will continue on for a further 12 months until 30th June 2022.
Therefore for the minimum pension withdrawal rates for the 2021/2022 are as follows:
Other Budget Superannuation Announcements
With the recent budget, some of the key superannuation announcements are as follows:
- From 1 July 2022, individuals aged 67 – 74 will no longer be required to meet the work test when making or receiving non-concessional superannuation contributions or salary sacrificed contributions.
- From 1 July 2022, the eligibility age to make downsizer contributions into superannuation will be reduced from 65 to 60 years of age.
- The maximum amount of contributions that can be released from superannuation under the first home super saver scheme (FHSSS) will be increased from $30,000 to $50,000.
- Currently, an SMSF will remain an Australian superannuation fund where the members/trustee of the SMSF are overseas temporarily for a period not exceeding 2 years. The Government has announced a proposal to extend this safe harbour to 5 years.