20 September 2023
What’s improving in super this tax year?
In the 2022-23 Federal Budget, the government laid out some changes to superannuation in Australia. These changes will roll out from 1 July 2022, and may impact your super. It’s super important to stay on top of any changes – so you can continue to look out for your financial future.
So, what are the new changes to super? Here’s the rundown.
Updates for all Aussies
The 2022-23 changes to super include three key areas:
Increase in the percentage of employer super contributions.
Removal of the $450 threshold for super contributions.
Expansion of the First Home Super Saver Scheme.
With every paycheck, your employer has to pay a percentage of your income into your super fund. This is called the Superannuation Guarantee (SG) – and this year, it will rise from 10% to 10.5% of your income. This is great news, as a rise in super will help strengthen the financial future for millions of Australians.
As a result, you might notice a slight change in your take-home pay to compensate for the 0.5% increase in super depending on how your organisation chooses to manage their increased superannuation obligation.
Expansion of the First Home Super Saver Scheme
In the 2022-23 tax year, the maximum withdrawal from the First Home Super Saver Scheme (FHSSS) will increase from $30,000 to $50,000. This means you can access up to $50,000 worth of voluntary super contributions to save for your first house deposit.
Increase in co-contribution limits
The lower-income threshold for super co-contribution will increase to $42,016 and the higher-income threshold will increase to $57,016.
If you’re eligible and make personal super contributions during the financial year the government will pay a super co-contribution to help you save for retirement.
Updates for older Aussies
For Australians aged over 60, relevant changes to super include:
Removal of the work test for people ages 67 -74.
Expansion of the Downsizer Scheme.
Reduction of the minimum drawdown rates.
Increase in co-contribution limits.
Increase to the low-rate cap.
From 1 July, the work test will no longer apply up until age 75. So if you’re a retiree aged between 67 and 74, you can still add to your super without having to satisfy any employment hours test – as long as your super is less than $1.6 million, rising to $1.7 million in July 2022.
Expansion of the Downsizer Scheme
The Downsizer Scheme allows you to make a one-off contribution of $300,000 to your super when you sell your home, outside the concessional and other rules.
From 1 July, the eligibility age for this scheme will be lowered from 65 to 60 years old. And if you’re in a couple, you can contribute $300,000 each.
Reduction of the minimum drawdown rates
If you’re a GuildPension member, you’ll enjoy a further extension to the temporary reduction in superannuation minimum drawdown rates for the 2022-23 tax year.
Increase to the low-rate cap
The low-rate cap is the limit on the amount of taxable components (both taxed and untaxed elements) of a lump sum that can receive a lower rate of tax. It means you can withdraw a set amount from your super without paying tax if you’re between your preservation age and age 60.
In 2022-23, the low-rate cap will increase to $230,000.
What does all this mean?
At GuildSuper we’re all about keeping you in the loop so you can make the most of your super. These changes will happen automatically, so you don’t need to do anything. If you have any questions, don’t forget you can always call one of our friendly team on 1300 361 477.