Changes to super from 1 July

The new financial year brings some changes to super. These changes are a result of Federal government legislation coming into effect.  

Removal of the $450 threshold for SG contributions 

From 1 July 2022, those earning less than $450 per month (who may often be women) will receive Superannuation Guarantee (SG) contributions to their super account. Previously individuals earning less than $450 per month were not eligible to receive SG contributions from their employer.  

This helps low-income earners build their retirement savings, through employer contributions and compounding investment returns. 

Employer SG increase 

Employer SG payments are 10.5% from 1 July, up from 10%. Income earners benefit from the SG increase with more money going into super accounts, at a tax effective rate of only 15%. 

First Home Super Saver (FHSS) scheme 

An aspiring homeowner can save up to $50,000 in voluntary contributions that can be released to purchase a first home, up from $30,000 prior to 1 July 2022. The First Home Super Saver (FHSS) scheme provides a tax-effective way to save by making additional personal contributions. 

If members are in a couple, they can collectively save up to $100,000 for their deposit by saving up to $50,000 in each person's account.  

Members can contribute a maximum of $15,000 in voluntary contributions to their super account each year under the scheme.   

Downsizer contributions 

The eligible age to make a downsizer contribution has been reduced from 65 to 60 years old from 1 July 2022.  

A downsizer contribution is when members make a one-off contribution up to $300,000 (individual) or $600,000 (couple) to their super from the sale of their family home, if they have owned it for at least 10 years.  

This contribution won’t count towards the concessional or non-concessional contributions caps. If the member is part of a couple, the contribution can be split equally across their accounts. Other conditions apply.  

Work test 

From 1 July 2022 if a member is between 67 and 74, they no longer need to meet a work test to make salary sacrifice contributions or non-concessional super contributions. The current work test requires a member to show they have been in gainful employment for at least 40 hours in any consecutive 30-day period in the financial year for which the contributions are made. 

Pension drawdown requirement 

The Federal Government sets a minimum amount that members must withdraw from their income stream/pension account each year. Due to COVID, as a temporary measure, the Government reduced this minimum amount for the 2019-21 financial years, by 50%.  

The Government has announced that they will extend the 50% reduction until 30 June 2023.  

More information about limits on withdrawals