Federal Budget 2021 - Find out more about the key proposed changes below and what they could mean for you. These proposed changes will come into effect 1 July 2022.

Before we start, we’d like to thank our members for making Australia a ‘nation to be proud of’.

In the words of the Treasurer, faced with a once-in-a-century pandemic, the Australian spirit shone brightest in so many of our members – the doctors, nurses, teachers and emergency workers on the frontline. Thank you.

1. Getting the most out of your super

What’s changed?

The First Home Super Saver Scheme is designed to help more Australians save for a first home using their super. Saving inside super is beneficial because you can pay less tax on your super than you do on savings outside of super. The change raises the amount you can save inside super to $50,000, up from $30,000.

What it means for you

This is good news for younger members or even older members saving for their first home –the tax-advantaged nature of super means you can reach $50,000 more quickly than if you were saving outside of super. It’s easy to make additional contributions through our mobile app – you can download it now.

For more about the changes to the First Home Super Saver scheme, read our article, Now save even more for your first home through your super.

What’s changed?

Before the announcement last night, employers were only required to pay super for their employees if the employee earned more than $450 per month. And as an employee, even if you worked for multiple employers and earned more than $450 per month in total, but not more than $450 per month from any one employer, you received no super payments. The announcement tonight removed the $450 per month threshold.

What it means for you

Super will now be paid on your behalf by all employers, regardless of how much you earn. This is great news for all Australians, because it opens up the super system to all workers and helps everyone save for their retirement.

The Superannuation Guarantee is legislated to increase over time to 12% - SG will increase to 10% on 1 July 2021.

2. Retirees and super

What’s changed?

The minimum age for the downsizer contribution will be lowered from 65 to 60. This will allow Australians nearing retirement to make a one-off after-tax contribution of up to $300,000 for an individual, or $600,000 for a couple, when they sell their family home.

What it means for you

This improves the flexibility for Australians to contribute to their superannuation savings and may encourage people to downsize sooner and increase the supply of family homes.

Downsizer contributions can be made after the sale of a person’s principal place of residence, held for a minimum of 10 years and you do not need to meet the work test. It is also important to note that making a downsizer contribution may affect your eligibility for Centrelink pension.

For more about downsizer contributions, read our article, Use your home to fund your retirement.

What’s changed?

If you’re aged 67 to 74, you’ll no longer need to meet the work test when making, or receiving, non-concessional (after-tax) superannuation contributions or salary sacrificed (before-tax) contributions.

What it means for you

This improves the flexibility for older Australians to continue to contribute into their super, allowing retirees to add more to their super more freely, without having to satisfy any work test. If you make personal concessional contributions, you will still need to complete the work test.

Keep in mind, that the existing $1.6 million cap on lifetime superannuation contributions will continue to apply (increasing to $1.7 million from 1 July 2021). The annual concessional and non-concessional caps will also continue to apply.

For more about the changes to the work test, read our article, Adding to your super will get easier.

3. Other financial changes you may benefit from

What’s changed?

he Federal Government will pick up the tab for up to 95% of your daily childcare fee, if you have more than one child in childcare and earn less than $90,000.

What it means for you

If you’re a parent, this measure is intended to help you get back into the workforce or increase the amount of paid work you do by subsidising the cost of childcare. Whether the subsidies available provide meaningful financial assistance depends on the amount you earn, and how many children you have.

What was announced and what it means for you

The low and middle-income tax offset is a rebate of up to $1,080 for singles and $2,160 for dual-income couples. It’s been extended for another year, and will benefit you if you are one of the 10 million Australians who earn less than $90,000 p.a.