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What to Expect from the Upcoming Superannuation Changes

From the 1st July 2022, as mentioned in the 2021 Federal Budget there are a few significant changes to superannuation contributions.

Minimum Wage Threshold for Superannuation Contributions

Currently there is a $450.00 a month wage threshold, so if you have employees in this lower income bracket that earn under $450.00 a month you may not currently be paying a superannuation contribution. From 1 July 2022 this will be abolished, with the current legislative changes before Parliament.

Remember it is up to the employee to choose which super fund they want their employer to pay their contributions into. If the employee doesn't advise their employer of their preferred fund, then the employer must take steps to request the employees stapled super fund from the ATO.

Superannuation Percentage Increase

From 1 July 2022 the Superannuation Guarantee is legislated to increase from 10% to 10.5%. CEO Glen McCren of Association of Superannuation Funds of Australia (ASFA) said ''this move is to significantly increase contributions being made on behalf of employees and boosting long-term retirement outcomes''. The other good news for this particular improvement is the government's aim for that number to rise until it reaches 12% on 1 July 2025.

Work Test Abolished for Retirement Age Employees

Under current legislation if you are retirement age (67 year +) and want to continue contributing to your superannuation you must satisfy the work test. Simply put the ATO says you need to be gainfully employed for at least 40 hours over a consecutive 30 day period. This work test is also due to be abolished from 1 July 2022.

If you would like to know more around navigating superannuation and policy changes within your organisation, contact one of our local coaches.

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