By Anthony Flapper, Matthews Steer Accountants & Advisors
Treasurer Josh Frydenberg’s hotly anticipated Federal Budget 20/21 delivered a number of changes to superannuation that may have implications for family business owners. Here are the ‘super’ headlines you need to be aware of from the ‘coming back’ budget aimed at accelerating Australia out of the COVID-19 doldrums.
Downsizer Contribution Extended
From July 1, 2022, the eligibility age for downsizer contributions will be reduced from 65 to 60-years-old. The downsizer contribution enables people to use the proceeds from selling their family home to make a one-off, pre-tax contribution to their super. Subject to certain criteria, both members of a couple are entitled to make downsizer contributions from the sale of the same house, avoiding some of the non-concessional super caps that would normally apply.
Work Test Scrapped for Older Australians
The government has also scrapped the work test for people aged between 67 and 74. Currently if you fall into that age bracket, you can only make a contribution to your super if you satisfy a work test that proves you work a minimum of 40 hours over a 30 day period. That’s a test most retirees can’t pass! From July 1, 2022, retirees aged under 75 will be able to make non-concessional contributions, utilizing the three-year, bring-forward rule (making up to three years’ of non-concessional [after-tax] contributions to their super in a single income year) and will have the option to make salary sacrifice contributions.
$450-per-month threshold removed
Family business owners may also be impacted by the government’s decision to remove the $450 monthly threshold on super payments. From July 1, 2022 it will be compulsory for employers to make super contributions to employees regardless of their monthly incomes, in a move designed to improve financial security for low-income and gig economy workers, and narrow the gender pay gap.
If you’d like more information about how the Federal Budget ’21 superannuation updates may impact you, please speak to a member of our Wealth Management team by calling (03) 9325 6300 or emailing info@matsteer.com.au.
The information provided is of a general nature only, and doesn’t take into account your personal objectives, financial situation or needs. It does not constitute financial, investment or taxation advice, and should not be relied on as such.Before making any decisions involving financial products or services, you should read the relevant Financial Services Guide (FSG) and any applicable Product Disclosure Statement (PDS). We also recommend that you seek independent professional advice as to the suitability of the products or services which is relevant to your particular financial circumstances.