Federal Budget - 2021/22 Highlights

In this year’s Federal Budget, the Government has taken some positive steps to improve the retirement outcomes for Australians in part-time and casual jobs, as well as narrowing the gender gap in retirement savings. Below are the five key proposals that may affect your super.

The $450 per month income threshold will be removed

Currently, employers only need to make SG contributions to you if you are 18 years and older and are paid $450 or more (before tax) per calendar month. 

The Government has announced it will remove the $450 per month income threshold and expects that, from 1 July 2022, Employers will be required to pay SG contributions to all eligible employees aged 18 or older, regardless of their income.

For example, if you currently have multiple part-time or casual jobs, each paying less than $450 per month, then you would not receive any SG contributions. From 1 July 2022, you will receive SG contributions from each employer, regardless of your monthly income.

Removing the $450 monthly earnings threshold is a positive step towards boosting retirement savings for disadvantaged individuals, most specifically women who are low-income earners.

The First Home Super Saver Scheme will be expanded

Currently, if you’re looking to purchase your first home you can make voluntary contributions to your super account up to $30,000 and apply to withdraw these contributions to add to your home deposit.

From 1 July 2022, you’ll now be able to withdraw more of your super voluntary contributions, after the Government announced that voluntary contributions accessed under the First Home Super Saver Scheme will increase from $30,000 to $50,000 which could help our members buy their first home sooner. 

The Work Test for voluntary super contributions will be removed

If you’re aged between 67 to 74, you’ll have more opportunities to continue to contribute to your super account as you enter retirement, after the Government announced that the work test will be removed from 1 July 2022. This applies to you if you’re making or receiving non-concessional superannuation contributions or salary sacrificed contributions, but does not apply to personal deductible contributions.

This gives our members more flexibility and opportunity to boost their retirement savings. 

Downsizer contributions will be available to more people

Currently, eligible people aged 65 or older who sell their home to downsize, can put a downsizer contribution of up to $300,000 from the proceeds of selling their home in their retirement savings.

From 1 July 2022, the eligibility age will be lowered from 65 to 60, giving members more options to prepare for their retirement.

Pensions Loan Scheme

The Government has announced additional funding and flexible changes to the Pensions Loan Scheme (PLS) over the next four years.  If you’re an older Australian, this allows you to receive a voluntary non-taxable fortnightly loan from the government as a supplement for your retirement income and acts a voluntary reverse mortgage type loan, helping you unlock equity on your real estate assets

More information on this scheme is available here

Importantly, the Super Guarantee is set to increase from 1 July 2021

Currently your employer pays you a Super Guarantee (SG) of 9.5% of your wage. From July 2021, the (SG) rate will increase to 10% and will continue to rise by 0.5 percentage points each year until it reaches 12% by July 2025.

Below is when the SG rate increase will happen

1 July 2021 – 30 June 2022


1 July 2022 – 30 June 2023


1 July 2023 – 30 June 2024


1 July 2024 – 30 June 2025


1 July 2025 – onwards


Source. Australian Government ATO Key Superannuation Rates and Thresholds, 2021

This increase in SG could make a significant impact on your super balance once you retire, especially for women, who have typically been workers in part-time and casual jobs with lower incomes.