Super Special - June 2021

Jane Hume - Minister for Superannuation, Financial Services and the Digital Economy, courtesy ABC

A number of key changes to Super have been passed in recent days and they will likely impact you in some form. For some people, this will also provide you with the opportunity to make very last minute contributions to Super for this financial year ending 30 June.

First things first...

Extending the age at which you can make non-concessional (after-tax) contributions

• The bring-forward provision can start (be triggered) from this 2020/21 financial year, if you are under age 67 on 1 July of the financial year. This was previously age 65.

This is good news as it:

• provides more opportunities for people to make non-concessional contributions; and

provides reassurance to those people who had already made contributions and hoped that the new rules would be passed in time.

Work Test changes for 2020/21

If you are 65 or 66, you can contribute to your Super without having to meet the work test. However, there is now very little time left (9 days exactly) to make additional contributions to your Super for the 2020/21 financial year. This is down to the delays in government passing the laws.

Proposed changes to non-concessional contributions (from the recent May 2021 budget) still to be passed include:

• Individuals aged 67-74 being able to make non-concessional Super contributions without meeting the work test, up to the maximum allowed (aka Super cap).

MyGov

The ATO has also announced that your Updated Personal Transfer Balance Cap will be available online from 5 July 2021. So if you have a MyGov account you will be able to access this information yourself.

Other important changes...

Super Performance Ratings on Investments and Fees

• The ATO will rate and rank funds based on the investment performance of the fund's default Super product, usually called My Super, on an annual basis;

• Funds will be assessed on their longer term investment performance;

• It is expected that non-default Super products will also be assessed from next year onwards too; and

• Fees will also be included for comparison between funds.

Single Default Account (stapled funds)
- From 1 November 2021 when you start a new job, your choice of Super fund stays with you. This will avoid the problem of you having multiple Super funds which can erode your Super savings due to:

• the costs of an administration fee in every fund; and

• overpaying for insurance across multiple funds.

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