2022 Federal Budget: Key Superannuation and Tax Changes Treasurer Josh Frydenberg’s 2022 Budget introduced several measures that will impact My SMSF members. These changes affect superannuation, retirement planning, and household finances. Superannuation Guarantee Increase to 10.5% The Superannuation Guarantee (SG) rate is currently 10% of most Australians’ income. From 1 July 2022, it will rise […]
2022 Federal Budget: Key Superannuation and Tax Changes
Treasurer Josh Frydenberg’s 2022 Budget introduced several measures that will impact My SMSF members. These changes affect superannuation, retirement planning, and household finances.
Superannuation Guarantee Increase to 10.5%
The Superannuation Guarantee (SG) rate is currently 10% of most Australians’ income. From 1 July 2022, it will rise to 10.5%. The rate will then increase by 0.5% each year until it reaches 12% in July 2025.
Federal Budget – Minimum Pension Drawdown Extension
The 50% reduction to the minimum super pension drawdown requirements for retirees will continue until 30 June 2023. This extension aims to give retirees more flexibility in managing their pension income.
Work Test Removal for Ages 67 to 74
Currently, the work test requires you to work at least 40 hours over 30 consecutive days in a financial year before making certain contributions. From 1 July 2022, the work test will be removed for individuals aged 67 to 74 when making non-concessional or salary-sacrificed contributions. However, it will still apply to personal deductible contributions.
First Home Super Saver Scheme (FHSSS) Changes
From 1 July 2022, the maximum withdrawal from the FHSSS will increase from $30,000 to $50,000. This scheme allows first home buyers to make voluntary contributions into super and then withdraw them to buy their first home.
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Annual voluntary contribution cap: $15,000
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Lifetime voluntary contribution cap: $50,000 per person
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Couples can withdraw up to $100,000 combined
Federal Budget – Downsizer Contribution Age Lowered to 60
The minimum age for downsizer contributions will drop from 65 to 60. Eligible Australians can make a one-off post-tax contribution of up to $300,000 per person (or $600,000 per couple) when selling their family home.
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The home must be the principal residence and owned for at least 10 years.
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Contributions do not count toward concessional or non-concessional caps.
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Even those above the transfer balance cap of $1.7 million can contribute, though the amount will count toward the cap when converted to a pension.
Key Super Rates and Thresholds for 2021–22
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Concessional contributions cap: $27,500
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Non-concessional contributions cap: $110,000
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General transfer balance cap: $1.7 million
Cost of Living Tax Offset
Eligible individuals will receive a one-off $420 cost of living tax offset.
Cost of Living Payment
Social security recipients and concession card holders will receive a $250 tax-free payment per individual or $500 per couple. Payments are expected in April 2022.
