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This information was prepared by Resolution Life Australasia Limited ABN 84 079 300 379, AFSL No. 233671 (Resolution Life). A copy of the Product Disclosure Statement can be obtained by contacting Resolution Life. This general advice has been prepared without taking into account your particular financial needs, circumstances or objectives. You should consider the appropriateness of this information in light of your circumstances. This advice is based on our understanding of current law as at September 2022, and is based on its continuance unless stated otherwise. While every effort has been made to ensure the accuracy of the information, it is not guaranteed. Resolution Life do not actively monitor breach of superannuation contribution caps. You should keep track of the contributions made to your account in respect of the caps applicable to you. You should obtain professional advice before acting on the information contained in this communication. Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information. Resolution Life is also not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.
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On 1 July 2022 there were significant changes made across the superannuation landscape. It’s worth understanding what these changes are and what they mean for you and your superannuation.
1. Work test removal (conditions apply)
The work test requirement will be abolished, and older Australians no longer need to meet the work test in order to make superannuation contributions.
What this change means for superannuation members
Removing the work test requirement simplifies the rules around superannuation contributions and increases flexibility for Australians to save for retirement.
This change means that fund members under the age of 75 will be able to make or receive personal contributions and salary sacrificed contributions without meeting the work test requirement, subject to existing contribution cap limits
However, it is worth noting that members aged between 67 to 74 will still need to meet the work test if they wish to claim a personal superannuation deduction for their contribution. For these members, there will be no changes to the way they need to lodge their notice of intent to claim or vary a personal super contribution deduction.
The only change is that the Australian Taxation Office (ATO) will be checking to see if these members meet the work test when they lodge their tax return.
2. Extension of temporary reduction in superannuation minimum drawdown rates
The 50 per cent temporary drawdown reduction was first introduced in 2020 as part of the government’s response to COVID-19. It has now been extended further to the 2022-23 financial year, starting from 1 July 2022 until 30 June 2023.
There are no changes or actions needed from those who have previously opted to receive the reduced minimum pension drawdown. They will continue to receive the reduced payment amount into the new financial year.
Pensioners who wish to opt in to receive the reduced payment, or who want to revert to their default payment or a specified payment amount, should contact their pension provider for further details.
3. Super guarantee (SG) rate rise
The SG rate increased from 10 per cent to 10.5 per cent. This means that employers must now use this new rate to calculate how much super to pay to their employees. This new rate is applicable to all super paid on or after 1 July 2022, even if some or all of the pay period is for work done prior to the date.
The SG rate is legislated to rise incrementally to 12 per cent by 2025.
4. Super guarantee (SG) threshold removal
On 1 July 2022, the SG eligibility threshold of $450 per month was removed. This means that, from this date, employers are required to make SG contributions to all eligible employees regardless of how much they earn.
Employees must still meet all other SG eligibility criteria. As such, those under 18 years of age will only be eligible for SG contributions if they work more than 30 hours per week.
5. First home super saver (FHSS) scheme
The first home super saver (FHSS) scheme allows Australians to save money for their first home inside their super fund. Under the scheme, fund members can apply to release a maximum of $15,000 of their voluntary contributions from any one financial year.
Previously, fund members were able to release up to $30,000 in eligible super contributions, plus associated earnings, across all years. As of 1 July 2022, this limit will be increased to $50,000.
It is worth noting that the amount of eligible contributions that can count towards your FHSS maximum releasable amount for each financial year will remain at $15,000.
Need more information?
If you need help understanding these changes to superannuation and how they affect you, speak to your financial adviser or refer to the following articles on the ATO website: