May 2021 Budget Update

<< Back to newsletters home

May 2021 Budget - Superannuation

Repealing the word test for voluntary contributions

Individuals aged 67 to 74 (inclusive) will be able to make non-concessional (including under the bring-forward rule) or salary sacrifice contributions without meeting the work test. This is subject to existing contribution caps and existing total superannuation balance limits.

Reducing the eligibility age for downsizer contributions 

The eligibility age to make downsizer contributions into superannuation will be reduced from 65 to 60 years of age. All other eligibility criteria remains unchanged, allowing individuals to make a one-off, post-tax contribution to their superannuation of up to $300,000, per person, from the proceeds of selling their home. 

These contributions will continue not to count towards non-concessional contribution caps. 

Relaxing residency requirements for SMSFs 

SMSFs and small APRA funds will have relaxed residency requirements through the extension of the central management and control test safe harbour from two to five years. 

The active member test will also be removed, allowing members who are temporarily absent to continue to contribute to their SMSF.

Removing the $450 per month threshold for superannuation guarantee eligibility

The Government will remove the current $450 per month minimum income threshold, under which employees do not have to be paid the superannuation guarantee by their employer. 

Pension reduction July 2021/2022 

The Government did not announce an extension of the halving of the account based pension minimums. As a result, the standard minimum drawdown requirements will apply from 1 July 2021.

If you have any questions about how these measures may affect you, please contact us.