A quick summary of the more relevant highlights from the Budget that may affect our clients:
- Super Caps increases
| Changes to Superannuation thresholds from 1 July 2021 – 30 June 2022 | |
| Transfer Balance Cap | $1.7M |
| Concessional Contribution Cap | $27,500 |
| Non-concessional Contribution Cap | $110,000 or $330,000 over 3 years |
| Superannuation Guarantee | 10% |
| Government Co-contribution ($500) | Lower income threshold: $41,112 – Upper income threshold: $56,112 |
- Superannuation proposed changes:
- Downsizer contribution can be made from age 60 – This will allow an after-tax contribution of up to $300,000 per person when selling the family home to boost retirement savings
- Eligibility to make NCCs under the bring forward rule – Individuals aged 67-74 will be able to make NCCs using the bring-forward rule. Currently, the bring-forward rule can only be triggered if a person is aged under 65 on the prior 1 July.
- Work test for contributions abolished for those aged over 67 when making non-concessional super contributions or salary sacrificed contributions
- Removal of $450 monthly threshold for compulsory super, extending SG to more employees
- SMSF Residency requirements relaxed from 1 July 2022
- Taxation:
- Extension of tax offset for the Low and Middle-Income Tax Offset (LMITO) worth up to $1,080 has been extended to cover 2021/22 FY.
- Medicare levy surcharge and private health insurance thresholds unchanged
- Personal and business tax: Low and middle income tax offset retained for 2021/2022
- Continuation of instant asset write off programs (purchase before 30/06/2023)
- Home ownership proposals:
- First Home Super Saver Scheme (FHSSS) – The Government will increase the maximum amount of voluntary super contributions that can be released under the FHSSS from $30,000 to $50,000. *The amount of voluntary contributions in a financial year remains limited to $15,000
- Family Home Guarantee for single parents – This provides pathway to home ownership to support single parents with dependents, regardless if you’re a first home buyer or a previous owner-occupier, with a deposit as little as 2%
- New Home Guarantee – Specifically for first home buyers seeking to build/purchase new home with a deposit as little as 5%
- Social security and aged care:
- Changes made to remove Childcare subsidy cap to provide more support to high income earners and families with multiple children in care.
- Pension Loan Scheme (PLS) – Increased flexibility of this PLS to allow access up to two lump sum advances in any 12 months period up to a total value of 50% of maximum annual rate of aged pension. The government will invest a total of $17.7 billion on aged care reform over 5 years.
General Advice warning: the information in this article is general in nature, it is not advice specific to your needs. If you want to act upon the information in this article then you should seek advice from a qualified professional. VJC WM accepts no liability to any party for acting from this information unless they have sought advice in a formal engagement with VJC WM for this purpose.
