It doesn’t seem like that long ago that we saw some new superannuation legislation changes to the age limits & work test for making contributions to super, but here we are again with more changes still. These will be welcomed by retirees that come into effect from 1 July 2022 so let’s run through them and see how they can work together for maximum benefit.

  • Increase of the age required to meet the work test to make non-deductible contributions from 67 to 75. This means you can make non-deductible contributions to your super fund until you turn 75.
  • The same age limits apply if you wish to make salary sacrifice contributions however the work test is still required for those wanted to making personal concessional contributions. Read our blog about the work test here.
  • Bring forward rule is now available to those aged between 67 and 75. Read more about the bring forward rule here.
  • Decrease of age limit to access the downsizer contribution to age 60. Read our previous blog on the eligibility criteria for the downsizer here.
  • Removal of the Super Guarantee Low Income Threshold: The Superannuation Guarantee exemption for employers to make contributions for employees earning less than $450 per month will be removed.

So what do all of these mean together? An important point to remember is that there has been no change to the pension age of 65 meaning after this time you are able to access as much of your super as you like. This allows you to draw down your super (which may include a taxable component) and “re-contribute” back as tax free. This can have great tax benefits to your non-dependant beneficiaries in the event of your death.

On top of this, if you combine the downsizer and the bring forward rule, you and your partner could boost your superannuation retirement savings by up to $1,260,000 instantly. When combined with the above re-contribution strategy you can potentially turn a large portion of your super to tax effective tax-free component for estate planning purposes.

However, these can be complex strategies so get in touch with us here to discuss these superannuation legislation changes in more detail and confirm if they suit you.