Let’s look at what super changes might be coming your way.

Retirement and superannuation seem to be top of mind for a whole bunch of people at the moment. 

Maybe it’s because we’re all a bit tired from Covid – cue the great resignation or dreaming of stopping work altogether. Or as it’s international women’s day as I write this, it’s about women not automatically having less super by virtue of the fact they often take time off working to raise children or caring for parents (along with earning less care of the gender pay gap) and are thereby retiring with 43% less super than men. Or maybe it just might be federal budget time – especially in an election year where the superannuation rules get tweaked to ultimately benefit whichever party is doing the changing in order to get them across the line on election day. 

Super Changes already happening 

For part-timers

As of July 1, 2022 – the $450 income threshold required to be eligible for compulsory employer super contributions will be removed. This is likely to benefit those just beginning their careers, who are working in part-time jobs and women who’ve cut back on hours to look after their families. 

For Seniors

As of early March 2022, the work test for those 67-74 years to stop them from contributing to their super unless they were employed was removed. And the age at which you can pump more money into your super after selling your family home when you downsize has dropped from 65 to 60. 

Increases to super

If you’re a business owner/employer, best prepare now for how you’re going to tackle the next employer guaranteed superannuation rise scheduled to take place on July 1, 2022. At that point, the super guarantee will rise to 10.5%

Currently being looked at

Business owners be warned of super changes that might affect your cash flow. There’s also a move on to have employers pay super at the same time you pay your staff their wages. This is being considered because there’s an estimated more than $2Billion in unpaid super with many companies paying their super late and some not at all if the business is under stress – which results in staff losing out on their mandated super. And, then being more likely to be reliant on the government in retirement. 

Super changes are also likely on the cards for the wealthier folks with tax-free super pension balances of $1.7million, who are then also stashing extra funds (which is unlimited in nature) in their regular superannuation funds, thus paying only 15% tax rather than the up to 45% they might possibly pay outside super. Several superannuation bodies are calling for excess funds to be removed from being under the auspices of super. 

And as I write this it’s International Women’s Day and a bill to introduce super onto paid maternity leave has just been knocked back. With women so far behind men in terms of their average balances (and the gender pay gap only increases that with time), this is something that’s likely to be revisited in some form or another come election time. 

In a different version of the bill above, the Association of Superannuation Funds of Australia has called for a different kind of baby bonus – paid directly to the super account of anyone who gives birth or is the primary carer. Watch this space. 

And that’s where we can help. If you’re looking for a trusted financial guide to help you (or your business) plan for and navigate through the interesting waters that super changes can be or help you set up a family trust or self managed super fund, we’d be delighted to help. You can call us on 6023 1700.

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