Highlights from the 2021 Federal Budget

TL;DR

The video provides a general overview of changes in superannuation and retirement income streams, including the elimination of the work test for contributions up to age 74 and increased withdrawal limits for the first home saver scheme.

Transcript

g'day and welcome to this week's video my name is robert gowdy and uh during the week we had the federal budget what i thought i'd do is just provide a very general overview of some of the changes that came in affecting people's superannuation and retirement income streams and also the way that we can contribute to superannuation and when employers... Read More

Key Insights

• 🤕 The work test requirement for making contributions to superannuation has been eliminated for individuals up to age 74, allowing for larger non-concessional contributions.
• 🤕 Contributions from the sale of a home into superannuation can now be made from the age of 60 onwards, reducing the previous age limit of 65.
• 🈷️ Employers will now be obligated to make superannuation contributions for employees earning less than $450 within a month.
• 👪 The first home saver scheme offers tax advantages to individuals making concessional contributions to super, with an increased withdrawal limit of $50,000 for the deposit on their first home.
• 🎏 Unwinding income stream conversions in retirement offers more flexibility for retirees, as the assets test threshold may no longer be a concern.

Questions & Answers

Q: What is the work test requirement for making concessional contributions to superannuation?

Previously, individuals between 65 to 74 years old had to meet a work test of working 40 hours over a 30-day period. However, this requirement has been eliminated, allowing contributions without meeting the work test.

Q: What is the change in contribution limits from the sale of a home into superannuation?

Previously, individuals aged 65 and above could contribute up to $300,000 from the sale of their home. However, the age limit has been reduced to 60, allowing individuals in this age bracket to make the same contribution.

Q: How has the requirement for employer superannuation contributions changed?

Previously, employers were not required to make super contributions for employees earning less than $450 within a month. However, this has now changed, and starting from July 2022, employers will need to make super contributions for all employees.

Q: Can you explain the changes in the first home saver scheme?

The first home saver scheme allows individuals to make concessional contributions to super (up to $15,000 per year) to reduce their tax liability. The withdrawal limit for using these contributions as a deposit for their first home has been increased from $30,000 to $50,000.

Summary & Key Takeaways

• The work test for making contributions to superannuation has been eliminated, allowing individuals up to age 74 to contribute larger non-concessional lump sums into their super without needing to meet the work test.

• Individuals aged 60 and above can now contribute up to $300,000 into superannuation from the sale of their home, reducing the previous age limit of 65.

• Employers will now be required to make super contributions for employees earning less than $450 within a month, starting from July 2022.

• The first home saver scheme allows individuals to make concessional contributions to super for tax advantages and increased withdrawal limits for the deposit on their first home, now expanded to $50,000.