Federal Budget Highlights 2020-21

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Federal Budget Highlights 2020-21
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• Last night the FY2021-22 Federal Budget was
  handed down. In this article we will review some
  of the proposed implications to superannuation.

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• Super Guarantee set to increase
• Super Guarantee (SG) contributions, currently set
  at 9.5, will increase to 10 in July 2021, and
  by July 2025 will increase to 12 of your
  employees base wage. At this stage, the below
  changes are proposals only. For them to take
  effect, they need to be passed into law.
• The 450 per month income threshold will be
  removed
• Currently, employers only need to make SG
  contributions for employees that are 18 years and
  older and are paid 450 or more (before tax) per
  calendar month

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• From 1 July 2022, the Government has announced
  theyll remove the 450 per month income
  threshold and employers will be required to pay
  SG contributions to all eligible employees aged
  18 or older, regardless of their income. This is
  a significant change to employers with a young or
  a casual workforce.

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• Fewer restrictions on contributions for older
  Australians
• If you have employees aged between 67 to 74 they
  will have more opportunities to contribute to
  their super as the work test will be removed if
  they make or receive non-concessional or
  salary sacrificed contributions, subject to
  existing contribution caps.

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• More for first home savers
• First home buyers will be able to withdraw up to
  50,000 of their voluntary super contributions
  under the First Home Super Saver Scheme. This
  increased from 30,000.
• Investment incentives and tax cuts
• The Government is extending temporary full
  expensing for an additional year until 30 June
  2023. Temporary loss carry-back is also being
  extended to include the 2022-23 income year.

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• In addition, reducing the tax rate for small and
  medium companies, from 30 per cent in 2014-15 to
  25 per cent from 1 July 2021.
• Your Future, Your Super
• Although no further announcements were made in
  the Budget, the legislation is scheduled for
  debate in the House of Representatives on
  Wednesday 12 May. If passed, likely to progress
  to the Senate in June at the earliest. We will
  continue to update you with further information
  as it comes to hand and reach out to our team for
  information and support.

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