May 2021

The Federal Budget – superannuation changes

From the Federal Budget there have been many changes to superannuation and SMSFs. Most of these changes are positive if you are someone who puts money into super.

From the Federal Budget there have been many changes to superannuation and SMSFs.  Most of these changes are positive if you are someone who puts money into super.

  • You will now be able to put $50,000 into your First Home Super Saver Scheme savings in your superannuation balance, up from $30,000 originally available.  If a couple takes advantage of this measure, it will allow around $100,000 in concessional savings for their first home, as well as an additional 15% bonus where they are on a tax rate above 30%.
  • You will now be able to make downsizer contributions from age 60, down from age 65.
  • You will be able to put non-concessional contributions into super (including using the bring forward rule) up until age 74without the need to be working.  You will still need to meet the work test if you want to make tax-deductible contributions.  This provides some very good planning for removing taxes from death benefits paid to your adult children.
  • Currently, if you are working part-time and receive less than $450 per month your employer is not required to make superannuation contributions on your behalf.  That exemption is being removed and employers will now need to make super contributions.
  • There are old legacy products in Self-Managed Superannuation Funds known as ‘Complying Pensions’.  People are stuck in these products and the government will provide a 12-month window to withdraw from these Complying Pensions.
  • The government will be relaxing the residency requirement for SMSF to allow you to stay overseas for up to 5 years.
  • The government also announced in the Federal Budget that it will not be proceeding with a measure to extend the early release of superannuation for a victim of domestic violence.

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