Proposed Super Changes in 2022
Proposed Super Changes in 2022
With Christmas and New Year celebrations behind us, I really hope you managed to have a safe and healthy break from work, from overwhelming covid news, or just from your usual daily tasks, and you managed to get away or celebrate in a very special way.
My way of relaxing and recharging my batteries is always a trip to the Victorian Alps enjoying some physical activities, hiking long distances, sleeping in my little tent under the stars, having an evening meal near the campfire, waking up early to the beauty of the unforgettable sunrise and watching stunning sunsets and photographing this stunning part of Victoria.
Each one of us has a way of perfect holiday, relaxing and enjoying some free time, away from the usual daily hustle and bustle, so please let me know below the video what is your perfect holiday?
And now, that the festive season is over, I think January is the perfect time to review your situation, assess your financial position and start planning for the best year.
As Thomas Edison said: “Good fortune is what happens when opportunity meets planning” so I think now is an opportune time to start thinking about what you wish to accomplish this year, where you are heading and how you want to improve your financial outcome within the next 12 months.
And it makes no difference if you still working or you have already retired, there is always a room for improvement.
And today we will talk about the financial changes we can expect to be introduced during 2022 by our government that might impact your planning, as well as our About Retirement TV plans for this new year.
As originally introduced in the 2021-22 budget – you can read my full Federal Budget 2021-22 article, there have been number of recommendations made by the government to be introduced from 1st July 2022 and they include:
- Expansion of the First Home Super Saver Scheme
In order to assist the first home buyers, it has been recommended to increase the maximum withdrawal from the First Home Super Saver Scheme from $30,000 to $50,000. Obviously one needs to meet all eligibility criteria in order to withdraw those funds.
- Abolishing the work test for retirees – big benefit for retirees.
Many financial changes are being done by retirees pass the age of 65 or even 67 in order to be better prepared for the planned retirement. So it only makes sense to remove the work test we have in force rights now. From 1st July 2022, if you are aged between 67 and 74, you will be able to top up your super without having to satisfy any test providing that your super fund’s value is less than $1.7 million in July 2022. This amount is increased from the current limit of $1.6mil.
This measure will assist many retirees to make further deductible contributions (concessional contributions) or uneducated contributions (non-concessional contributions) to their superannuation funds. You will benefit from improving the value of your retirement savings by having more time for your personal contributions, your voluntary contributions but always keep it within the contribution caps applicable for the specific type of super contributions. You can watch all my Superannuation related videos that I will link at the end of this video to understand what type of contributions would work for you best.
- Expanding the Downsizer Scheme – another huge benefit for retirement planning
Currently, to utilise the Downsizer Contribution, you need to be over the age of 65, however from 1st July 2022 the eligibility age will be lowered from 65 to 60. The Downsizer Scheme allows eligible people who sell their home to make a one-off, $300,000 contribution to their super, outside the concessional and other rules. Couples can contribute $300,000 each. Please watch my read my articles:
- Downsizer Contribution to super – Part 1 – Rules, and
- Downsizer Contribution to super – Part 2 – Who can benefit
that explain in full all the details how the Downsizer Scheme works and who and how to benefit from it.
- Removing the $450 minimum income threshold for super contributions
Under the change, from 1st July 2022, employers will be required to pay the superannuation guarantee on the wages of employees’ earning less than $450 per month.
This change will mostly benefit all part-time workers, such as young people are under the age of 18, many women working part-time as well as many retirees, earning extra income from part-time employment.
Please keep in mind that all the above listed changes are still in the recommendation stage and need to be accepted by the parliament before 1st July 2022 to become new rules and new legislation.
I will keep you informed of all the changes or any other strategies that might impact your retirement planning.
Let’s make 2022 the best year in your financial efforts.
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