Superannuation Reforms and Financial Year End Planning

Australian Super Reforms and FY22 Planning | legalsuper

Virtually all of us now have super and for most Australians it’s our second-largest financial asset. At the same time, Australians are living longer meaning our super will need to go further to cover the cost of our life in retirement. 

You would think this means we all closely focus on our super. The reality is quite different. Most Australians are incredibly disengaged from their super, presumably, as they think someone else is making sure their super is not only safe but growing strongly.

Australia’s super industry has been the subject of continuous government review and reform. The level of change is hard enough for the super industry to digest, let alone the general community. On one view, this continuous change is another reason for the reluctance of Australians to engage with their super.

Following years of ongoing reforms and scrutiny, all sides of politics are promising no further changes in their election campaigns, but there are a number of recently announced changes pertinent to both legal employers and people working in the legal community that take effect from 1 July this year including:

  • Increasing the super guarantee – employers’ compulsory contributions – from 10% to 10.5% of wages. 
  • Giving part-time workers – mainly women – access to super by removing the $450 monthly income threshold they must earn before being eligible for compulsory employer contributions.
  • Abolishing the work test that previously stopped those aged from 67 to 74 from contributing to super unless they were employed; and
  • Lowering the age threshold of the super downsizing scheme from 65 to 60 years old.

Another important consideration for all superannuants as the end of the financial year approaches is the range of contribution caps and thresholds and associated tax concessions that apply to individuals wishing to make additional payments to their superannuation before 30 June 2022.

All relevant information regarding these matters is available at the Australian Tax Office website. However, employers and employees are also encouraged to speak directly with their own super fund to discuss matters such as their choice of investment option and paying pre-June 30 contributions in addition to those made by their employer.

About legalsuper

legalsuper is the only super fund specialising in the legal profession. Their vision is to help the Australian legal community accumulate wealth for its life in retirement.  This vision includes not only keeping their members' super safe but empowering them to engage, understand and value their super more.

legalsuper is governed by a Board of legal professionals with a deep understanding and direct experience across the legal community. The fund continues to deliver strong, long-term investment returns to members supported by high levels of member and employer engagement and service.

 

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Disclaimer: The views and opinions expressed in this article do not necessarily reflect the official policy or position of Novum Learning or Legal Practice Intelligence (LPI). While every attempt has been made to ensure that the information in this article has been obtained from reliable sources, neither Novum Learning or LPI nor the author is responsible for any errors or omissions, or for the results obtained from the use of this information, as the content published here is for information purposes only. The article does not constitute a comprehensive or complete statement of the matters discussed or the law relating thereto and does not constitute professional and/or financial advice.