Changes to superannuation from July 1 2022

Several changes are being made to superannuation from July 1 2022 in an effort to fast track Australia’s economic recovery following COVID-19, with a particular focus on women and part-time and casual employees.

What are the changes?

These are:

• An increase to the superannuation guarantee, which will increase by 0.5% taking the guaranteed amount to 10.5% of income received.
• The removal of $450 monthly income threshold for super contributions.
• The removal of super contribution ‘work test’ for those aged between 67-74.

The removal of the threshold means that all workers will be entitled to receive employer super contributions. These changes are essential news for businesses that employ a largely casual workforce.

The work test which currently requires a person aged between 67-74 to be employed for at least 40 hours in a consecutive 30 day-period during the financial year before any super contributions can be accepted, is to be scrapped from July 1 2022. However, the test will continue to apply where an application to make personal deductible contributions is made.

The thresholds for a number of existing super measures increased on July 1 2021. This includes increases in the amounts that workers can voluntarily contribute to super through salary sacrifice or after-tax contribution.

Key super rates and thresholds for 2021-22 are:

• Concessional contributions cap to increase from $25,000 to $27,500
• Non-concessional contributions cap to increase from $100,000 to $110,000
• General transfer balance cap to increase from $1.6 million to $1.7 million

Contact TaxAssist Accountants

If you need any help or advice with the financial aspects of running your business, please contact us today on 02 9608 3707 or complete our contact form. We’ll be glad to help.

Last updated: 9th July 2022