With the introduction of the Treasury Laws Amendment (Enhancing superannuation outcomes for Australians and helping Australian businesses invest) Bill 2021, the government has made some significant changes to SMSF and superannuation strategies. Included in the Bill is the repealing of the work test for superannuation.

Once passed, the Bill will include the following changes:

Repealing the work test for superannuation contributions

The Bill amends the ITAA 1997 to remove the requirement of an individual aged between 67 and 75 to meet the work test to contribute non-concessional and salary sacrifice contributions.  You will still be required to pass the work test if you claim a deduction for personal superannuation contributions (concessional contribution).  The Bill also allows individuals to make or receive non-concessional contributions under the bring forward rule.  Individuals who are aged over 75 and meet the work test can only claim a deduction in relation to a contribution that is made on or before 28 days after the month they turn 75. This amendment is scheduled to take effect 1 July 2022.

Removing the monthly minimum threshold for salary or wages to count towards the superannuation guarantee. 

Previously employers were only required to pay SGC once an employee earned over $450 in a month.  With the removal of this threshold SG will paid regardless of the employee’s monthly earnings. This amendment is scheduled to take effect 1 July 2022.

First Home super saver scheme maximum releasable amount

The amendment is to increase the limit on the maximum amount of voluntary contributions made over multiple financial years to be released under the first home saver scheme from $30,000 to $50,000. This amendment is scheduled to take effect 1 July 2022.

Downsizer contribution age limit down to 60

The amendment allows individuals aged 60 and above to make downsizer contributions to the superannuation fund from the proceeds from of selling their house.  This is a reduction from the current age limit of 65.  This amendment is scheduled to take effect 1 July 2022.

Segregated current pension assets

The amendment allows superannuation trustees to choose their preferred method of calculating exempt current pension income.  For funds fully in retirement phase your clients may no longer be required to obtain an actuarial certificate to claim ECPI. This amendment will take effect the following quarter after royal assent.

Extension of temporary full expensing of depreciating assets

The amendment extends the current temporary tax incentives to small businesses to allow them to apply simplified depreciation rules.  These incentives will be extended until 30 June 2023.  There is no change in the eligibility requirements.