Enhancing the super system and driving business investment
The Government has introduced into Parliament a Bill to "improve flexibility for Australians preparing for retirement, support more Australians to own their first home and help Australian businesses invest.” Refer to the Treasury Laws Amendment (Enhancing Superannuation Outcomes for Australians and Helping Australian Businesses Invest) Bill 2021
The Bill includes the following measures:
• It removes the $450 per month income threshold under which employees do not have to be paid the superannuation guarantee by their employer.
The Government notes that recent reforms have paved the way for this important change (in particular, the introduction of Single Touch Payroll).
- The maximum amount of voluntary contributions that people are able to release under the First Home Super Saver Scheme (‘FHSSS’) will increase from $30,000 to $50,000.
- The eligibility age to make ‘downsizer contributions’ into super will reduce from 65 to 60 years of age, allowing more older Australians to consider downsizing to a home that better suits their needs, freeing up the stock of larger homes for younger families.
- The Bill supports the repeal of the work test for non-concessional and salary sacrificed contributions (but preserves the work test for personal deductible contributions made by individuals aged between 67 and 75). It will also make amendments necessary to allow eligible individuals to make non-concessional superannuation contributions under the bring-forward rule.
Australians will be able to take advantage of these changes from 1 July 2022.
In addition, the legislation reduces costs and simplifies reporting for superannuation funds for the 2021/22 income year onwards, by allowing superannuation fund trustees to use their preferred method of calculating exempt current pension income where the fund is fully in the retirement phase for part of the income year (but not for the entire income year).
The Bill also extends the temporary full expensing measure by 12 months, to 30 June 2023, to further support business investment and the creation of more jobs. That is, businesses with aggregated annual turnover of less than $5 billion will be able to deduct the full cost of eligible assets, of any value, purchased after 7.30pm AEDT on 6 October 2020 and first used or installed ready for use by 30 June 2023.
Ref: Treasurer’s media release, 27 October 2021
