Budget Briefing & Superannuation Changes
On Tuesday, 29th March 2022, the Government handed down its 2022-23 Federal Budget.
From a Superannuation and Financial Advice perspective, the budget was extremely quiet. The Government are primarily focused on supporting low to middle-income earners, social security recipients and first home buyers.
Policies for fuel prices and low-income earners will provide some targeted relief from rising cost pressures.
Key policies to note:
- Temporary reduction to the fuel excise from 44.2 cents to 22.1 cents. Estimate savings are $14.59 for a mid-sized SUV with a 60L petrol tank.
- Cost of living cash payment of $250 for eligible recipients on social security benefits or concessions.
- Extension to the reduction in superannuation pension minimum drawdown rates.
- Additional business tax deductions for external training programs and digital adoption.
Legislated Superannuation Changes from 1st July 2022
There are a number of Superannuation changes from last year’s budget due to take effect from 1st July 2022. A majority of the changes are beneficial for retirees or those approaching retirement.
- Australians aged 67 to 75 can make post-tax contributions and salary sacrifice contributions to Superannuation without needing to meet a work test. The work test does still apply to personal deductible contributions.
- The ‘bring-forward’ rule for non-concessional contributions has been extended to those aged 74 and under, previously 67. This rule allows for up to three years worth of after-tax contributions ($330,000) to be made in one year.
- Downsizer of up to $300,000 can now be made from age 60, previously 65.
- Superannuation guarantee payments will increase from 10.0% to 10.5%.
We will discuss the impact of these changes at your next annual review meeting. If you have any immediate questions please feel free to contact us directly.
General Advice Warning: Any comments made in this video do not take into account your objectives, financial situation or needs. Before acting on any general advice, you should consider if it is appropriate for you.