Compared to recent years, the Budget was relatively mute on this front, with only two items of note.
Pension Drawdowns – 50% Reduction Extended to 2022/23
This reduction to minimum annual drawdown amounts for superannuation pensions and annuities will be extended by a further year to 30 June 2023. This is aimed at avoiding the scenario where retirees are forced to sell assets, in the prevailing volatile economic climate, to satisfy the standard draw down percentage requirements.
Of course, this measure will only prescribe a minimum. Recipients are permitted to draw down more than this if they so choose.
Super Guarantee Increase to Proceed
There was no indication that amending legislation would be introduced to repeal the existing law that will see the SG rate increase to 10.5% (up from the current 10%) from 1 July 2022. SG applies to an employee’s (and to some contractors) ordinary time earnings.
Employers will need to factor this extra cost into their budgets depending on how existing employment remuneration arrangements are structured. Speak to your advisor if uncertain.
Other 1 July Changes Although not announced in the Budget, be mindful of other superannuation changes coming on stream from 1 July 2022 including:
Bring-forward non-concessional cap extended to anybody under 75 (subject to Total Superannuation Balance)
Work test requirements abolished for 67-74 year olds in respect of making or receiving personal and salary sacrificed contributions
$450 per month income threshold abolished for SG contributions – those earning below this amount may now be eligible for SG
Reduction to age 60 (down from 65) for the home downsizer contribution scheme
Increase on voluntary contribution release amounts under the first home super saver scheme from $30,000 to $50,000.