Important updates – changes coming into effect from 1 July – do they affect you?
As end of financial year approaches, a range of new initiatives and legislated changes to Australia’s superannuation system come into effect. A lot of these strategies can be really complex to implement, which is why the Modoras team is ready and waiting to help you take advantage of these changes to benefit you and your family. Here’s a rundown of what you need to know:
EOFY reminder: 30 June is D-DAY! End of year super contributions must be RECEIVED by Super funds by 30 June, or you’ll miss out on the tax benefit. Make sure you allow for adequate payment processing times (3-5 business days for BPay transfers). You must also lodge the “Notice of Intent to Claim” form with your super fund prior to completing your annual tax return.
Super Guarantee rate change: from 1 July 2022, the legislated increase to 10.5% of annual salary for Australia’s compulsory superannuation rate takes effect. Don’t forget to review your existing salary sacrifice arrangements to ensure you are still within the annual $27,500 contributions cap.
Work Test removed: The work test required those aged 67-74 to meet certain work requirements to make contributions to their superannuation accounts. From 1 July 2022, this test will no longer apply, making it simpler to make personal or non-concessional contributions and secure your future in a tax-effective environment. All other eligibility criteria continue to apply – including total super balance limits and contribution caps.
Downsizer contributions: Eligibility age for downsizer super contributions will reduce from 65 to 60 from 1 July 2022. This will allow more individuals to boost retirement savings with up to $300,000 per spouse with the proceeds of the sale of their home in a tax-effective environment. Additional eligibility criteria apply.
Bring forward rule “brought forward”: A great way to make after-tax contributions over and above the non-concessional contributions cap is the “Bring-Forward” rule. From 1 July, those aged over 67 with large amounts to contribute into super or recontribution strategies can access this option. This can help manage tax for non-dependent beneficiaries, equalizing balances between spouses or contributions into younger spouses’ accumulation. Other criteria continue to apply including total super balance and contribution cap limits.
Minimum pension payment rates extended: The temporary 50% reduction to minimum pension payments has been extended for the 2022/2023 financial year
Call us – we’re happy to help!
We understand that ever-changing regulations are tricky to keep up with. Many of these areas are complex, and its important that you understand all of the eligibility criteria, caps, limits and restrictions that apply.
That’s why our extended team of experts – integrated across wealth, accountancy and business advisory – are here to help you!
IMPORTANT INFORMATION: This blog has been prepared by Modoras Accounting (QLD) Pty. Ltd. ABN 81 601 145 215. The information and opinions contained in this blog is general information only and is not intended to represent specific personal advice (Accounting, taxation, financial, insurance or credit). No individuals’ personal circumstances have been taken into consideration for the preparation of this material. The information and opinions herein do not constitute any recommendation to purchase, sell or hold any particular financial product. Modoras Accounting (QLD) Pty. Ltd. recommends that no financial product or financial service be acquired or disposed of or financial strategy adopted without you first obtaining professional personal financial advice suitable and appropriate to your own personal needs, objectives, goals and circumstances. Information, forecasts and opinions contained in this blog can change without notice. Modoras Accounting (QLD) Pty. Ltd. does not guarantee the accuracy of the information at any particular time. Although care has been exercised in compiling the information contained within, Modoras Accounting (QLD) Pty. Ltd. does not warrant that the articles within are free from errors, inaccuracies or omissions. To the extent permissible by law, neither Modoras Accounting (QLD) Pty. Ltd. nor its employees, representatives or agents (including associated and affiliated companies) accept liability for loss or damages incurred as a result of a person acting in reliance of this publication. Liability limited by a scheme approved under Professional Standards Legislation.