As we enter into a new financial year, it is important to be aware of changes to key super rates/caps and thresholds. Below is a summary of recent ATO announcements, outlining the most important changes to superannuation for the 2022 financial year:
1. Super Guarantee Rate
From 1 July 2021, the Superannuation Guarantee rate will increase from 9.5% to 10%. It is planned to increase by 0.5% each year until it reaches 12% on 1 July 2025.
2. Super contribution caps will increase
From 1 July 2021, the superannuation concessional and non-concessional contribution caps will be indexed. The new caps will be:
|Year||Concessional Cap||Non-Concessional Cap|
|2021-22||$27,500||$110,000 or $330,000 |
over 3 years
* Note: the total superannuation balance limit that determines the eligibility of an individual to make non-concessional contributions will increase from $1.6 to $1.7 million, effective from 1 July 2021.
3. Bring forward arrangements
Individuals who are under 67 years old may be able to make non-concessional contributions of up to three times the annual non-concessional contributions cap ($110,000 from 1 July 2021) in a single year. The amount of “bring forward” you can access will be dependant on your superannuation balance (particularly if your total super balance is less than $1.7 million but more than $1.48 million).
4. Transfer Balance Cap Indexation (Pension Limit Increase)
From 1 July 2021, the General Transfer Balance Cap (Pension Limit) will be indexed from $1.6 million to $1.7 million.
The ‘transfer balance’ cap began on 1 July 2017. It is a lifetime limit on the total amount of superannuation that can be transferred into retirement phase income streams, including most pensions and annuities. Earnings on superannuation balances that are in retirement phase (pension phase) is tax free.
With the indexation change, every individual will now have their own personal transfer balance cap of between $1.6 and $1.7 million, depending on their circumstances.
5. Temporary Minimum Pension Drawdowns Extended
The government temporarily halved minimum drawdown amounts in March 2020 in response to the COVID-19 pandemic. This was introduced to allow pension members to withdraw less of their retirement savings and keep a greater amounted invested.
These temporary minimum amounts were due to return to standard levels from 1 July 2021. However, on 29 May 2021 the government advised temporary minimums would be extended.
The full set of standard and temporary rates for each age group for the 2022 financial year are outlined in the table below:
|Age||Minimum Payment Rates |
|Reduced Minimum |
Payment Rates (Temporary)
|65 – 74||5%||2.5%|
|75 – 79||6%||3%|
|80 – 84||7%||3.5%|
|85 – 89||9%||4.5%|
|90 – 94||11%||5.5%|
6. SMSF Fund Membership Increase
From 1 July 2021, self-managed super funds will be able to have up to six members (previously restricted to a maximum of 4 members).
If you are considering expanding your fund, you will need to consider things such as:
- What your fund’s trust deed allows
- The Structure of your fund
- Your fund’s reporting requirements
Some State and Territory laws restrict the number of trustees a trust can have. Because an SMSF is a type of trust, your fund may be impacted by these restrictions. We therefore strongly recommend you seek professional advice and check State or Territory law restrictions before registering or expanding your fund.
Should you require any assistance with your SMSF administration and meeting your compliance requirements, or you have any questions about the above superannuation changes, please contact is our Self-Managed Superannuation Fund (SMSF) Manager Simon Abbott on 03 5244 6867.
Disclaimer: The information that provided in this article is factual in nature and objectively ascertainable and, therefore, does not constitute financial product advice. Importantly, the factual information that has been supplied does not take into account your personal circumstances, objectives or goals.
Davidsons is not licensed to provide any financial product advice nor make any recommendations in respect of any financial product. If you require such advice, you will need to consult a financial adviser who is licensed to provide financial product advice before you make a decision on a financial product.