Increased flexibility for older Australians from 1 July 2022

Changes made to the downsizer contribution and the work test will come into effect 1 July 2022.

Downsizer contribution age requirements

In last year’s Federal Budget the Government announced that they intended to lower the minimum age an individual could make a downsizer contribution from 65 to 60.

The scheme allows eligible people to add up to $300,000, or $600,000 per couple, to their super account, from the proceeds of selling their home. The program will help reduce pressure on housing affordability, by freeing up housing stock for people trying to enter the housing market.

Work test removal

In addition, in last year’s Federal Budget the Government announced their intention to remove the work test for individuals aged 67 to 74 years old. While contributions can be made by anyone in this age range, the work test will still apply to people who claim a tax deduction for their contribution.

Currently people aged 64-74 years old are required to meet a work test to be able to make any contribution to superannuation.

Removing the work test will provide Australians with more flexibility in how and when they contribute to their super.

Looking ahead to 1 July 2022

Legislation relating to the downsizer contribution age requirements, as well as the removal of the work test were recently passed, and are expected to come into effect on 1 July 2022.

As there were no further announcements in this year’s Federal Budget, we’re confident both changes will come into effect on 1 July 2022, providing older Australians with more flexibility and control over how their retirement savings.

For further information on the downsizer contribution, please see our webpage, Understanding superannuation contributions and taxes.

2022/23 Federal Budget Updates

woman at work with a coffee

Superannuation Guarantee increase

Australians are being set up to retire with more money as the compulsory Superannuation Guarantee rate will rise from 10% to 10.5%.

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Reduced pension minimum drawdown rates extended

As part of the 2022/23 Federal Budget, the Government has announced their intention to extend the reduced pension minimum drawdown rates. 

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First Home Super Saver Scheme increase

Young Australians are provided an even greater opportunity to enter the property market with the amount they can withdraw under the First Home Super Saver Scheme increasing from $30,000 to $50,000.