Changes to Superannuation

by | Mar 8, 2022

There are a lot of changes proposed for Superannuation in 2022. Thanks to constant changes in super rules, it’s all too easy to miss out on an opportunity you didn’t know existed.

What we know as of February 2022. – Great news for retirees

The key superannuation changes that were proposed in the 2021 Federal Budget have now been passed into law. These changes will impact retirees and many people who are approaching retirement.

Changes include:

  • The removal of the work test requirement for non-concessional super contributions for people aged between 67 and 75
  • The extension of eligibility for individuals under 75 to make non-concessional contributions using the “bring-forward” rules
  • Eligibility to make downsizer super contributions has been extended to those aged 60 or more.

Work Test Requirement

The work test no longer needs to be met by individuals aged  between 67-75 when making salary sacrifice contributions and personal non-concessional contributions to super. However, the test still needs to be met to claim a tax deduction for personal concessional contributions.

Apart from the downsizing contribution, no non-concessional contributions can be made once a Total Superannuation Balance (TSB) reaches $1.7 million.

Concessional Contributions

Concessional contributions can be made irrespective of the TSB. There is a contribution cap of $27,500 a year. This includes super from all sources, including the compulsory employer contribution.

If you didn’t use the full $25,000 concessional contributions cap in 2018-19, 2019-20 or 2020-21, any unused cap amounts can be contributed this financial year – giving you a bigger deduction and tax savings.

For instance, if your concessional contributions were $18,000, $20,000 and $22,000 in each of the last three financial years, then have an additional $15,000 ($7000 + $5000 + $3000) to play with this financial year, and you (or your employer) can contribute up to $42,500 provided your TSB at June 30, 2021, was less than $500,000.

What happens if you didn’t use all your uncapped amounts before June 2022.

If you didn’t use unused cap amounts before June 30, 2022, all is not lost, as you can carry them forward on a rolling five-year basis. In the above example, $7000 can be carried forward until 2023-24, $5000 until 2024-25 and $3000 until 2025-26, provided that in the year you wish to apply them, your TSB at the previous 30 June is less than $500,000 – and, of course, you’re eligible to contribute

Changes to ‘Bring Forward’ Rules

There is no tapering of the ‘bring-forward rule’ for those approaching age 75. This means if a person’s age is less than 75 before July 1 – and they meet the eligibility criteria, including that which relates to the TSB – then the bring-forward rule may be triggered. It could enable a person to put up to $330,000 into their super, provided the bring-forward rule has not been used in the previous three years.

Contributions will need to be received no later than 28 days after the month the person turns 75. However, if a person turns 75 in June, they are not be permitted to trigger the bring-forward rule until July of the following financial year.

The ability to withdraw money from super and then re-contribute as a non-concessional contribution can be a valuable tool in reducing the death tax – paid on death benefit lump sums received by non-dependent adult children – as it could convert a portion of the taxable component of a super fund to the tax-free component.

Super contributions between partners

If there is a substantial imbalance in the super accounts of a couple, one partner could also withdraw, say, $330,000 and contribute it to their partner’s super, if the partner’s super does not exceed $1.7 million.

Downsizing Super Contributions

To make a downsizer contribution after the disposal of a property,(which you or your spouse owned for at least 10 years), you must be 65 or more at the time of the contribution. It allows you to boost your super even if you’re otherwise ineligible to contribute due to age, work status or TSB. From July 1, the minimum age is to be reduced to 60.

The ability to make a downsizer contribution at age 60 has significant benefits:

  • It could enable people with high super balances to put another $300,000 each into super because the $1.7 million limits on non-concessional contributions do not apply to downsizer contributions.
  • It can also assist people to maximise the amount they can have in super from the sale of their home.


A couple can make total contributions of $630,000 each from the proceeds of the sale of a property. The first contribution would be $330,000, using the bring-forward rule, and the second the downsizer contribution of $300,000. This is where the importance of seeking professional financial advice is crucial because the terms of a property’s sale may have to be tailored to maximise super contributions.

Impacts on Capital Gains Tax

In some cases, tax-deductible concessional super contributions can be used to reduce Capital Gains Tax (CGT). This is relevant if a person has less than $500,000 in super at the end of the previous financial year and have not been making concessional contributions because they have been out of the workforce for several years. It is possible that as much as $100,000 could be contributed to super using the catch-up concessional contribution strategy. This would eliminate CGT on the sale of an asset.

Super Assessment & Centrelink

As money in superannuation fund is not assessed by Centrelink until the holder reaches pensionable age – or starts an income stream from their super fund – the ability to contribute large amounts of money to super can be highly effective, especially if there is an age difference between the members of a couple. A senior partner may qualify for a part-age pension by holding the super in the younger person’s name.

Spouse contributions

The age limit for spouse contributions is now 74, but the receiving spouse must meet the work test or work test exemption from 67. A spouse contribution may give you the ability to claim a tax offset of up to $540. Boosting your spouse’s super while getting a tax benefit in the process is a win-win situation.

$450 monthly income threshold for mandatory employer contributions removed

The current $450 monthly income threshold prevents an estimated 300,000 low paid workers, 63% of whom are female, from receiving mandatory employer super contributions (superannuation guarantee contributions). The budget measures intend to remove this threshold and will ensure this group of workers are paid super. If you’re still working, even if for limited hours, this could mean more retirement savings.

Please contact our office for further information.

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