Changes to Your Super From July 1
If you're an employee in Australia, your employer is legally required to make contributions to your superannuation (retirement savings) account. Knowing your rights in regards to super can help you make informed choices for your future. The Australian Government is making some super changes that will come into effect at the start of the next financial year.
Keep reading to learn more about what these changes mean for you and your retirement savings. If you're after more information about super in general, you can also read our blog what you need to know about superannuation.
Here are some of the upcoming superannuation changes in Australia:
$450 Threshold Removal
The first change is the removal of the $450 monthly income threshold. Currently, if you earn less than $450 per month, your employer isn't required to make super contributions on your behalf. The government is getting rid of this threshold, which means that even if you only earn a small amount each month, your employer will still need to contribute to your super.
This is good news for employees who are paid a low wage or work multiple part-time jobs, as it means they'll be able to build up their retirement savings more quickly. The exception is workers under the age of 18 - employers only need to contribute to their super if they work more than 30 hours a week.
Increase in Super Guarantee Percentage
From July 1 2022 the general superannuation guarantee will rise from 10.00% to 10.50%. This means that your employer is required to contribute 10.50% on top of your wage to your superannuation fund. These contributions must be paid at least on a quarterly basis.
This increase is part of a timeline set out by the Australian Government that will see rates rise to 12.00% by 1 July 2025.
First Home Super Saver (FHSS) scheme
The FHSS scheme allows aspiring homeowners to make additional personal contributions, providing a tax-effective way to save for a home deposit. The concessional tax treatment of superannuation gives individuals a way to save money for a deposit faster.
According to the ATO:
From 1 July 2022, the amount of eligible contributions that can count towards your FHSS maximum releasable amount across all years will increase from $30,000 to $50,000.
The amount of eligible contributions that can count towards this total for each financial year will remain at $15,000.
If you’re considering using the FHSS scheme, you might find the Commonwealth Superannuation Corporation’s FHSS Calculator helpful.
Downsizing contributions into superannuation
Downsizer contributions allow eligible individuals to contribute up to $300,000 into their super fund from the proceeds of the sale (or part sale) of their home. From July 1 2022 the eligible age to make a downsizer contribution will be lowered from 65 to 60.
Some of the criteria for eligibility include:
The home must be in Australia
The home must have been owned for at least 10 years by you or your spouse
You must provide your fund with the 'Downsizer contributions into super form' prior to (or at the same time) as making your contribution
You have not made a downsizer contribution to your super previously
For detailed information visit the ATO's downsizer contributions for individuals page.
TRS Resourcing and Prime Super
As a member of the Recruitment, Consulting and Staffing Association Australia & New Zealand (RCSA), the peak body for the recruitment and staffing industry, TRS Resourcing uses Prime Super as our preferred fund. Prime Super has over 120,000 members with approximately $6.2 billion in funds. They offer choice and flexibility to members with 11 different investment options that cater to varying appetites for risk.
Read Prime Super's latest news for more information on how the changes in super in 2022 affect you.
Recruitment and Labour Hire You Can Trust
TRS Resourcing is a specialist recruitment and labour hire company that has supplied quality candidates to the Australian manufacturing, mining and oil & gas industries.
If you're looking for your next job or you need to find quality candidates for your business, get in touch with TRS Recruitment Consultants today.
To speak with TRS Labour Hire Recruitment Consultants, please contact the following offices: