Parliament passes legislation to enhance Australia's superannuation system

In early February 2022, the Morrison Government passed through the Parliament the Treasury Laws Amendment (Enhancing Superannuation Outcomes For Australians and Helping Australian Businesses Invest) Bill 2021 which will ensure superannuation continues to work in the best financial interests of all Australians.

What does the legislation mean for Australians?

The passage of the Bill will provide more flexibility for families and individuals preparing for retirement by allowing individuals aged between 67 and 75 to make non-concessional superannuation contributions under the bring-forward rule.

The legislation also supports the repeal of the work test for non-concessional and salary sacrificed contributions made by individuals aged between 67 and 75.

The Bill also delivers on a key commitment in the 2021-22 Women’s Budget Statement by removing the $450 per month income threshold under which employees do not have to be paid the superannuation guarantee by their employer. This will remove an outdated structural feature of the superannuation system and in doing so will improve equity in the system.

The Bill will also reduce costs and simplify reporting for superannuation funds by allowing 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. This measure will apply for the 2021-22 income year onwards.

When will the measures come into effect?

These superannuation measures will take effect from 1 July 2022.

The Bill and explanatory material are available on the Parliament of Australia website here.

Through these measures, the Morrison Government is ensuring the superannuation system works harder for all Australians by strengthening protections around the retirement savings of millions of Australians.

Source: Australian Government 

Summary of changes: 

1. Changes to work test conditions 
2. Extension of non-concessional bring-forward rule for people aged 67-74
3. Changes to eligibility age for downsizer contributions from age 65 to 60 which opens it up to more people
4. Removal of $450 per month threshold for super guarantee
5. Increase in the First Home Super Saver release amount to $50,000