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Your Future, Your Super: what the Super changes for 2022 mean for you

Your Future, Your Super: what the Super changes for 2022 mean for you

As announced in the 2021 Federal Budget, there are some big changes to the superannuation rules that come to life on July 1, 2022; changes that could affect your super and have tax implications for you. As we approach the end of the 2021 – 22 financial year, it’s a great time to look at year-end superannuation strategies and be prepared for the next financial year. That’s why we’ve compiled an overview of those changes and some actions you can take now to benefit your situation. 

First, let’s look at what the changes are. 

The 2022 Super changes 
  1. Low-income earners over the age of 18, regardless of how much they earn, are entitled to receive super guarantee payments 
  2. First home buyers who save for a deposit through their super, will see an increase in the maximum amount you can access 
  3. Downsize earlier and boost your super – contribute up to $300,000 from the proceeds of their main residence into a complying super fund without it being assessed under the contribution caps; the age will decrease to 60 from 65 
  4. Aged between 67-74: you won’t need to satisfy the ‘work test’ before making non-concessional contributions and salary sacrifice contributions to your superannuation
  5. Increase in the Super Guarantee rate from 10% to 10.5% for FY23, and continuously for each year by 0.5% until it reaches 12% on 1 July 2025
  6. The Government has decided to extend the 50% reduction in pension drawdown rate for FY23

Looking at the Super changes, you might already see how the updates affect you but are there risks or key benefits you should consider? 

Risks and benefits from the Super changes
  • The changes create opportunities for both older and younger Australians, as well as low-income earners, ultimately enhancing retirement for all 
  • Retirees can now leave more money in their super, in tax-free mode
  • There is now more support for homebuyers to purchase a home
  • Employers and business owners need to be aware and prepare to adapt to the changes
  • Risk of missing out on these new opportunities just by not being aware

You might be thinking, so how do I navigate and adapt to the Super changes for 2022? Is there actions I should get done right away?

The first action to take is simply to review the changes and analyse if any will benefit your situation. As you can see, the benefits vary depending on your age and situation, so knowing how these changes affect you will be advantageous.

The next course of action would be to discuss and get the best expert advice. To find out which changes might apply to you before and after 30 June to manage tax, maximise super savings, review super income streams and double-check if you could be maximising on these new opportunities.

Who can help you navigate the Super changes? 

Determining whether any of these changes apply to you is one thing. It’s a question of whether you should take advantage of them that may require some support. Reaching out to your accountant or financial advisor is a great start. You can prepare with questions to ensure you walk away with relevant information that makes sense to your situation. We’ve drafted some example questions to get you started. Be sure to know what applies to you by checking in with your financial advisor, accountant or your Super fund provider.

  • Is my employer making contributions? Are they making the correct contributions to meet the Super guarantee?
  • Do I have sufficient funds to make any extra contributions to help save tax?
  • How much have I contributed this fiscal year? Do I have a remaining contribution amount?
  • How should I structure my super contributions/salary packaging? 
  • Should I use my Super to help purchase a home?
  • Should I take advantage of the downsizer opportunity?
  • What are other ways I could maximise my Super?

The 2022 Super Changes will deliver benefits to many Australians but it’s still imperative that you understand your situation and whether you should take advantage of them. The questions above only cover a few aspects of how Super can work for you. We are sure there are many more and the q4 team is here to answer them. Contact us today.

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