Changes in Super Contributions from July 2022
Super contributions are changing from July 1, 2022, affecting pre-tax and post-tax contributions. The cap for pre-tax remains at $27,500 annually, while various changes enable more flexibility in making contributions, including catch-up opportunities. Post-tax contributions are affected by age limits and downsizer contributions, offering new options for those looking to contribute to their superannuation fund. Exemptions have been introduced for capital gains tax upon the sale of a business, allowing contributions up to $1.65 million. These changes impact total super balances and contribution limits.
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Presentation Transcript
SUPER CHANGES FROM 1 JULY 2022 Mark Ward
Pre-tax contributions The cap remains at $27,500 pa, regardless of how much you have in super. Work test applies. An employer s Superannuation Guarantee contribution Superannuation Guarantee contribution rate is now 10.5 per cent Superannuation Guarantee contribution rate is now 10.5 per cent rate is now 10.5 per cent and the $450 per month minimum income threshold no longer applies. Catch-up: Any unused concessional contribution cap amounts (since 2018-19) can now be used, provided the total amount you had in super was less than $500,000 at June 30, 2022.
Post-tax contributions - Work test: Those younger than 75 no longer have to demonstrate that they are working at least part-time to make non- concessional (non-tax-deductible) super contributions. Previously, this was only open to those under 67 This can be very helpful if people receive an inheritance or sell an asset after retirement.
Post-tax contributions: Non-concessional contributions can be up to $110,000 total super balance is less than $1.7 million total super balance is less than $1.7 million a year, as long as the total super balance is less than $1.7 million. Three years worth of contributions, up to $330,000, can be made as long as the total super balance is below $1.48 million, but this rules out any further contributions for the next two financial years.
Post-tax contributions: Downsizer contributions: Another welcome change from July 1, 2022 is that the age limit for the downsizer contribution has dropped, from 65 to 60. This applies to those selling their primary residence and, if conditions are met, allows a contribution of up to $300,000 to super. It is not subject to non-concessional contribution limits, even though it is treated as an after-tax contribution.
Post-tax contributions: Capital gains tax exempt contribution upon sale of a business, up to $1.65 million (lifetime cap). There is no limit regarding total super balance.
Contributions and TSB cap: All concessional contributions, downsizer and CGT- exempt contributions are not subject to the total super balance cap of $1.7 million. Earnings of the fund can also take balances above $1.7 million, meaning it is still possible to build superannuation balances above this level, and twice that for a couple.
