• Christine Lusher

Superannuation Changes - know your caps.

The 2021/2022 financial year is well underway, there have been some big changes to superannuation rules. Read how this could add up to a welcome boost to your retirement savings.

Whether you are just starting your super journey or close to retirement, it pays to know what’s on offer.


1. Superannuation Guarantee Increase

Good news! The rise in the Superannuation Guarantee (SG) to 10% will happen automatically. The SG rate is scheduled to rise again to 10.5% per cent on 1 July 2022 and gradually increase until it reaches 12% on 1 July 2025.


2. Know your superannuation caps

The annual limits on the amount you can contribute to super has been lifted.


The concessional (before tax) contributions cap has increased from $25,000 a year to $27,500. These contributions include SG payments from your employer as well as any salary sacrifice contributions and personal contributions you claim a tax deduction for.


The cap on non-concessional (after-tax) contributions has increased from $100,000 to $110,000. This means the amount you can contribute under a bring-forward arrangement has also increased, provided you are eligible.


3. Reduced minimum pension payments extended until 20 June 2022.

Those with eligible super pensions and annuities are required to withdraw a minimum percentage of their account balance each year.


Due to the impact of the COVID pandemic on retiree's superannuation savings, the minimum withdrawal amounts were halved for the 2019-20 and 2020-21 financial years. The government has extended the temporary 50 per cent reduction in minimum pension drawdowns until 30 June 2022.

Source: ATO


4. Increase to the TSB and TBC's (Total Super Balance and Transfer Balance Cap's)

Super remains the most tax-effective method of saving for retirement, there are however limits to how much you can save in super. Good news! These limits have just increased.


The Total Super Balance (TSB) has increased to $1.7 million up from $1.6 million. This is the threshold which determines whether you can make non-concessional (after-tax) contributions in a financial year and is assessed on 30 June of the previous financial year. The TSB at which no non-concessional contributions can be made this financial year will increase to $1.7 million from $1.6 million.


The Transfer Balance Cap (TSB) is the amount you can transfer from your accumulation account into a retirement phase super pension. The TBC has also increased to $1.7 million from $1.6 million.

More on the way…

The May 2021 Budget included other proposal's which have not yet been passed by parliament:

  • repeal the work test for people aged 67 to 74 who want to contribute to super

  • reduce the minimum age for making a downsizer contribution (using sale proceeds from your family home) from 65 to 60

  • abolish the $450 per month income limit for receiving the Super Guarantee

  • expand the First Home Super Saver Scheme

  • provide a two-year window to commute legacy income streams

  • allow lump-sum withdrawals from the Pension Loans Scheme

  • relax SMSF residency requirements.

Superannuation rules are complex, and mistakes can be costly. Make the of your situation and receive personal financial advice. We are currently offering online appointments while our Newcastle office is closed due to COVID restrictions.



What you need to know

This information is provided by Serendipity Wealth. The information contained in this article is of general nature only and does not take into account the objectives, financial situation or needs of any particular person. Therefore, before making any decision, you should consider the appropriateness of the advice with regards to those matters and seek personal financial, tax and/or legal advice prior to acting on this information.