Budget changes to super: more super for a first home and the end of the “work test” for older Australians

The 2021-22 Federal Budget has been handed down, with several changes to super and retirement being announced. Most were adjustments to existing rules, rather than sweeping changes. We’ve summarised the key points for members below.

FIRST HOME BUYERS CAN SAVE EVEN MORE OF THEIR DEPOSIT IN SUPER UNDER THE FIRST HOME SUPER SAVER SCHEME. 

The current situation: Eligible first home buyers can access up to $30,000 of voluntary super contributions to put towards a house deposit. The benefit is when you withdraw this money from super, you also withdraw the earnings, helping you save faster. 

What’s changing: Under the new rules, up to $50,000 can be contributed to super. Just like current rules, only voluntary contributions (like salary sacrifice or after-tax payments) can be released, not compulsory contributions from an employer. The new legislation won’t be in place until 1 July 2022.

THE $450 A MONTH INCOME THRESHOLD HAS BEEN SCRAPPED, SO 300,000 MORE PEOPLE WILL RECEIVE SUPER.  

The current situation: Workers must earn at least $450 a month from a single employer before super is paid to them. This disproportionately affects those in insecure part-time jobs, particularly women. 

What’s changing: The Government has abolished the minimum income threshold. It’s estimated an extra 300,000 workers will start receiving employer-paid super.

THE “WORK TEST” WILL BE ABOLISHED, FREEING UP SELF-FUNDED RETIREES TO TOP UP THEIR SUPER. 

The current situation: Those aged 67 to 74 must meet the work test before they can make contributions to their super account. This requires showing gainful employment for at least 40 hours over 30 consecutive days during the financial year. 

What’s changing: With the removal of the work test, older Australians who didn’t benefit from compulsory super throughout their working lives can contribute earnings or savings directly into their super account.

OLDER AUSTRALIANS ARE BEING ENCOURAGED TO DOWNSIZE THEIR FAMILY HOME TO BOOST THEIR SUPER AND FREE UP HOUSING. 

The current situation: Australians aged 65 and over can make a one-off contribution of $300,00 (or $600,000 for couples) into super when they sell their family home under downsizer rules. 

What’s changing: The minimum eligibility age for this scheme is being reduced to 60 from 65, encouraging greater take-up.

WANT MORE INFOMRATION OR NEED HELP?  

If you have questions or need help with your super, contact our Member Services Team on 1300 360 988 or by email at mail@firstsuper.com.au.