Federal Budget Update 2022/23

There were no major announcements for super in the 2022-23 Federal Budget. Hear about the upcoming changes announced last year that are going live this 1 July and how they may impact your super.

The 2022/23 Federal Budget’s key focus is on economic recovery and reducing the costs of living, with no major announcements around superannuation.

There are some changes coming in this 1 July that were announced in last year’s budget. Read on for more details about the measures that are going live this 1 July.

We’re also hosting a number of Federal Budget webinars to talk through the upcoming changes – there’s no additional cost for TelstraSuper members to attend, it’s part of your membership.

Register now

Upcoming changes to super — 1 July 2022

Extension of the temporary reduction in superannuation minimum drawdown rates

Announced in this year’s Federal Budget, the government has once again extended the 50 per cent reduction of the superannuation minimum drawdown requirements for account-based pensions and similar products for a further year to 30 June 2023. The minimum drawdown requirements determine the minimum amount of a pension that a retiree has to draw from their superannuation in order to qualify for tax concessions. Given ongoing volatility, this change will allow retirees to avoid selling assets in order to satisfy the normal minimum drawdown requirements.

Removal of “work test” for people between 67 and 74

Currently, people aged between 67 and 74 must meet a “work test” before being able to make voluntary contributions to super (both pre-tax and post-tax contributions) or receive contributions from their spouse.

The work test requires a person to be gainfully employed for at least 40 hours over a consecutive 30 day period during the financial year.

From 1 July 2022, individuals aged 67 to 74 years (inclusive) can make or receive post-tax contributions (including under the bring-forward rule) and salary sacrifice super contributions without meeting the work test, subject to existing contribution caps.

Members would however still have to meet the work test to make personal deductible contributions.

Save more in the First Home Super Saver Scheme (FHSS Scheme)

The First Home Super Saver Scheme – first announced in the 2017/18 Federal Budget – allows first home buyers to use a portion of their voluntary super contributions towards a house deposit. Until now, eligible participants have been able to withdraw up to $30,000 of their voluntary contributions towards the deposit, but from 1 July 2022 the limit increases to $50,000.

Voluntary contributions made from 1 July 2017 up to the existing limit of $15,000 per year will count towards the total amount able to be released.

Increase in employer super contributions to 10.5%

The super accounts of Australians will receive a super boost with another scheduled increase in Super Guarantee contributions from 1 July 2022.
The Federal Budget 2022 has maintained the previously legislated increase. The Super Guarantee will increase to 10.5% on 1 July and it will increase by 0.5% on 1 July each year thereafter until it reaches 12% in 2025.

More people eligible for super with removal of $450 threshold

Under current super rules, employers don’t need to make superannuation guarantee contributions for employees for whom they pay less than $450 per month. From 1 July 2022 this threshold will be removed, and these employees become eligible for employer paid super. So, employers must pay super for all their employees.

Eligibility age lowered for downsizer scheme

The downsizer scheme was introduced in the 2017-18 budget and allows eligible people aged 65 and over who sell their primary home to make post-tax (non-concessional) contributions to their super of up to $300,000 per person. Couples can contribute $300,000 each. These contributions do not count towards post-tax contribution caps.

From 1 July 2022, the eligibility age will be lowered to age 60. Other rules governing the scheme will remain unchanged, including that the eligible people will need to have owned their house for at least 10 years and must make the contribution to super within 90 days of receiving the proceeds of sale.