While a number of superannuation and retirement measures were announced, most of these are either changes or adjustments to existing measures. 

It’s important to remember that the budget measures outlined need to be legislated before they come into effect. 

Currently, workers must earn at least $450 per month from a single employer to receive compulsory employer super contributions. The removal of this threshold will ensure an estimated 300,000 low paid workers, 63% of whom are female, are paid super. 

Proposed start date: 1 July 2022 

The maximum withdrawal threshold for the Home Super Saver Scheme will be increased to $50,000, from $30,000. 

This scheme allows people to make voluntary contributions to superannuation to save faster for their first home. At present these contributions are capped at $15,000 a year and $30,000 in total.

Under the proposed changes, contributions into a super fund will be allowed by salary sacrifice up to a maximum of $50,000 in total. Where there is a couple involved, both individuals will be able to utilise their caps up to a maximum of $100,000. 

This scheme relates to voluntary contributions only. First home buyers cannot withdraw any part of their compulsory super savings – that is, super contributions made on their behalf by their employer – under the scheme. 

Proposed start date: 1 July 2022 

The budget will also abolish the work test, which requires those aged between 67 and 74 to be gainfully employed for at least 40 hours over 30 consecutive days during the financial year before concessional (before-tax) or non-concessional (after-tax) superannuation contributions can be made.

This will allow individuals aged 67 to 74 years (inclusive) to make or receive after-tax or salary sacrifice superannuation contributions without meeting the work test, subject to existing contribution caps. Individuals aged 67 to 74 years will still have to meet the work test to make personal deductible contributions. 

The existing $1.6 million cap on lifetime superannuation contributions will continue to apply (increasing to $1.7 million from 1 July 2021). 

Proposed start date: 1 July 2022

 The Government will provide $11.0 million over four years from 2021/22 (and $1 million per year ongoing) to the Australian Taxation Office to administer the transfer of unclaimed superannuation money directly to KiwiSaver accounts (the New Zealand equivalent of Australian superannuation funds).

Proposed start date: 1 July 2021

In another change to an existing measure, retirees who downsize their family home will be able to contribute $300,000 to superannuation ($600,000 for couples) at age 60, down from 65. This type of contribution is classified as a non-concessional (after-tax) contribution and is allowed on top of existing super rules and caps. 

The measure is exempt from the work test, but it is not exempt from the $1.6 million (rising to $1.7 million on 1 July) transfer balance cap, which limits the amount of money you can put into a pension phase account where the earnings are tax free.

Proposed start date: 1 July 2022

The flexibility of the Pension Loans Scheme (PLS) is being improved by giving participants access to advance payments of up to 26 fortnights’ worth of top-up payments as a lump sum and introducing a No Negative Equity Guarantee. This will provide immediate access to lump sums of around $12,000 for singles, and $18,000 for couples.

No Negative Equity Guarantee will mean that borrowers under the PLS, or their estate, will not owe more than the market value of their property, in the rare circumstances where their accrued PLS debt exceeds their property value. This brings the PLS in line with private sector reverse mortgages.

Proposed start date: 1 July 2022