Budget Edition
Welcome to our latest newsletter, Budget Edition, in which we provide a brief summary of super and retirement related measures.
Please remember that the following budget announcements are not yet law.
Reducing the eligibility age for downsizer contributions
The eligibility age to make downsizer contributions into superannuation is set to be reduced from 60 to 55 years of age. All other eligibility criteria will remain unchanged.
This change will provide a boost to the number of individuals eligible to make a one-off, post-tax contribution to their superannuation of up to $300,000, using the sale proceeds of their family home – regardless of their superannuation balance.
Relaxing residency requirements for SMSFs
Previously announced in the 2021/2022 Budget, the residency requirements applicable to SMSFs and small APRA funds were set to be relaxed through:
- The extension of the central management and control test “safe harbour” from two to five years, and
- The removal of the “active member” test – which would allow members who are temporarily absent from Australia to continue contributing to their SMSF.
The Government has confirmed that these changes, broadly aimed at allowing greater flexibility for SMSF members who are temporarily overseas, are still set to go ahead. However, the start date for both measures has been deferred.
Increased Commonwealth Seniors Health Card income threshold
The Government has confirmed its commitment to increase the income threshold for Commonwealth Seniors Health Card eligibility from $61,284 to $90,000 for singles and from $98,054 to $144,000 (combined) for couples.
This change will increase the number of individuals eligible to benefit from a Commonwealth Seniors Health Card.
Incentivising Pensioners to Downsize
The current Centrelink asset test exemption for proceeds from the sale of a family home, intended for the purchase of a new home, will be extended from 12 months to 24 months.
Additionally, for income test purposes, only the lower deeming rate (currently 0.25%) will apply to these exempted proceeds over the 24-month period. These changes will allow pensioners more time to purchase, build or renovate a new home before their pension is affected
Freezing of deeming rates
The Government has also confirmed that it will freeze the social security deeming rates at their current levels until 30 June 2024.
This change will support older Australians who rely on income from deemed financial investments, as well as the pension, to deal with the rising cost of living.
As always, don’t hesitate to contact one of the friendly Greenlight Super Services team members if you require further assistance on (02) 6273 1066 or info@glss.com.au.
This newsletter is for general information only. Every effort has been made to ensure that it is accurate, however it is not intended to be a complete description of the matters described. The newsletter has been prepared without taking in to account any personal objectives, financial situation or needs. The information contained is correct as of 26 October 2022
