The Government first announced several big changes to super contributions for older people in the 2021/22 Federal Budget. These included:
- partially removing the work test (and one-off work test exemption) for people aged 67 to 74,
- extending eligibility to make non-concessional contributions (NCCs) under the bring-forward rule to people under age 75 at the start of the financial year,
- increasing the maximum amount of eligible contributions made over multiple financial years that can be released under the First Home Super Saver (FHSS) Scheme from $30,000 to $50,000,
- reducing the downsizer contribution eligibility age from 65 to 60, and
- removing the $450 salary exemption for paying Superannuation Guarantee contributions.
The good news is that these proposals have now been legislated and are ready to go from July 1, 2022. They will create plenty of opportunities for people currently locked out of contributing to super or limited by the standard NCC cap.
In this Technical Journal, we consider the work test removal and extension of the NCC cap in further detail and outline the strategic opportunities these significant changes may create for your clients. A separate Journal on the change to the downsizer contribution eligibility age was published earlier this month.
