NECA FEDERAL BUDGET 2021-22
NECA is pleased to provide members with a snapshot of key measures contained in the federal government’s budget delivered by the Treasurer, the Hon Josh Frydenberg MP last night.
There’s a grab bag of initiatives in there designed to support businesses in the post-COVID economic recovery. A number of the infrastructure, energy and industry investments will sustain and enhance opportunities for electrical contractors.
It looks at Coronavirus and recovery measures, skills, training and apprenticeships with a $2.7 billion allocated to expand the boosting of apprenticeships, tax offsets and the continuation of instant-asset write-off to businesses, the extension of small business loan schemes and a significant allocation of budget to infrastructure and energy investments.
Click to read full report: NECA Federal Budget 2021-22 – Member Update FINAL.pdf
IMPORTANT CHANGES FROM 1 JULY 2021 Federal Budget
The Super Guarantee (SG) rate is increasing to 10% from 9.5%
Concessional contribution cap is increasing to $27,500
Non-concessional contribution cap is increasing to $110,000
Government co-contribution remains at $500 but the low income threshold is changing to $39,837 and the high threshold is changing to $54,837
Maximum super contribution base is increasing to $57,090 per quarter
The Government delivered the 2021-22 Federal Budget on Tuesday May 11, with a focus on economic recovery.
Below is a snapshot of some of the changes announced to superannuation that is expected to commence 1 July 2022. It is important to note that the policies outlined in this publication are yet to be passed as legislation and therefore may be subject to change or further refinement.
Removing the $450 per month threshold for Superannuation Guarantee (SG) eligibility
The removal of the current $450 per month minimum income threshold, under which employees do not have to be paid the SG contribution by their employer. When this initiative is passed, employers will be required to pay SG contributions, even when the employee earns less than $450 each month.
Work test for voluntary superannuation contributions to be repealed (for those aged 67-74)
Individuals aged 67 to 74 years (inclusive) will be able to make or receive non-concessional (including under the bring-forward rule) or salary sacrifice superannuation contributions without meeting the work test, subject to existing contribution caps.
Individuals aged 67 to 74 years will still have to meet the work test to make personal deductible contributions.
Downsizer contributions extended to people aged 60
The eligibility age will be reduced from 65 to 60 years of age. The downsizer contribution allows people to make a one-off, post-tax contribution to their superannuation of up to $300,000 per person from the proceeds of selling their home. Both members of a couple can contribute in respect of the same home, and contributions do not count towards non-concessional contribution caps. The change will allow more older Australians to consider downsizing to a home that better suits their needs, thereby freeing up the stock of larger homes for younger families.
Increasing the maximum releasable amount to $50,000 for First Home Super Saver Scheme
The maximum releasable amount of voluntary concessional and non-concessional contributions under the First Home Super Saver Scheme (FHSSS) will increase from $30,000 to $50,000.
Improving the flexibility of the Pension Loans Scheme (PLS)
The PLS is a voluntary, reverse mortgage type loan available to assist older Australians who wish to boost their retirement income by unlocking equity in their real estate assets. Eligible people will be able to receive a maximum lump sum payment equal to 50% of the maximum Age Pension. A maximum of two lump sum advances is permitted in a year. A ‘No Negative Equity Guarantee’ for PLS loans will be introduced, this means borrowers under the PLS will not owe more that the market value of their property. More information on the Pension Loan Scheme is available here.
Click here to view the 2021-22 Federal Budget Superannuation Fact Sheet.
At NESS Super, we are here to help.
If you have any questions about your super call our friendly team on 1800 022 067 Monday to Friday, 8.30am – 6.00pm (Sydney time) or email us on firstname.lastname@example.org