Superannuation changes from 1 July 2022
02 Sep 2022 8 min readA raft of superannuation changes came into effect on 1 July 2022. These changes present opportunities to save more in super for retirement or your first home.
What are the changes to superannuation from 1 July 2022?
On 1 July 2022, the following changes to super came into effect:
- More money available to withdraw from super for your first home
- Increased super guarantee contributions from 10% to 10.5%
- Super guaranteed for employees regardless of their income
- More super savings flexibility for people between 67 and 75 years old
- Earlier access to the downsizer contribution scheme
- Reduced minimum pension drawdown rates for 2022–23 financial year
1 July 2022 super changes explained
Access more super to buy your first home
Eligible members can now use the first home super saver (FHSS) scheme to access up to $50,000 (plus earnings, less tax) of their super to buy their first home. The previous maximum withdrawal amount under the scheme was $30,000. The increase means that couples could withdraw up to $100,000 from super to help with their first home loan deposit. You need to have made eligible contributions to your super first to access this money. Visit our FHSS scheme page for more detail on how it works.
Superannuation increase from 10% to 10.5%
The superannuation guarantee rate is scheduled to gradually increase to 12% by 2025. On 1 July 2022, the rate increased from 10% to 10.5%. Your payslip should now reflect that rate.
Super guaranteed for all employees
Before 1 July 2022, you had to earn $450 in a month to receive super from your employer. This rule has now been abolished. As long as you’re over 18 years old, your employer must pay you super — 10.5% of your income — no matter how much you earn. This change is great news for the estimated 300,000 low-income workers who were previously ineligible for the super guarantee. With most of these workers being women, this is a step in the right direction in closing the gender gap in super savings.
More super savings flexibility for people between 67 and 75 years old
People between 67 and 75 years old no longer need to meet the work test to make most types of contributions to super. Previously, the work test restricted people over age 67 and under 75 from adding more to their super unless they had worked for 40 hours within 30 days. The removal of the work test means that if you’re in that age group, you now have greater flexibility to add more to your retirement savings.
Additionally, the bring-forward rule was extended from age 67 to age 74. This rule lets you add up to $330,000 (3 times the annual after-tax cap) to your super over a 3-year period.
The removal of the work test combined with the extension of the bring-forward rule is a new opportunity for many to maximise their retirement savings. Read more about how you can take advantage of these changes and the limits that apply.
Earlier access to the downsizer contribution scheme
Australians can now access the downsizer contribution scheme from age 60 (reduced to age 55 from 1 July 2023) instead of 65. The downsizer scheme allows you to make a one-off contribution of up to $300,000 ($600,000 for a couple) to your super from the sale of your family home. Despite the name, you don’t actually need to downsize (or buy a new home at all). You can read our information sheet for full details on how the scheme works.
Reduced minimum pension drawdown rates for 2022–23 financial year
In response to market uncertainty during the COVID-19 pandemic, the government temporarily halved the minimum amount people had to draw down from their super pensions. The idea here was to ease concerns about drawing on your investments at a time of market volatility. This incentive has been extended for the 2022–23 financial year. If you have an NGS Income account you may decide to draw down less this year and leave more of your funds invested. Here’s what the rates are, depending on your age:
| Your age as at 1 July | 2021–22 and 2022–23 financial years — minimum annual payment (% of your account balance) |
Subsequent years — minimum annual payment (% of your account balance) |
|---|---|---|
| Up to age 65 | 2.00% | 4.00% |
| 65-74 | 2.50% | 5.00% |
| 75-79 | 3.00% | 6.00% |
| 80-84 | 3.50% | 7.00% |
| 85-89 | 4.50% | 9.00% |
| 90-94 | 5.50% | 11.00% |
| 95+ | 7.00% | 14.00% |
Frequently asked questions
Is super increasing in July 2022?
Yes — the super guarantee rate increased from 10% to 10.5% on 1 July 2022. The rate is scheduled to increase by 0.5% increments each financial year until it reaches 12% in 2025.
What are the superannuation changes for retirees?
1 July super changes that affect retirees include the:
- removal of the work test
- extension of the bring-forward rule
- earlier access to the downsizer contribution scheme
- reduced minimum pension drawdown rate.
How much can I put into super in a lump sum in 2022?
The answer to this depends on the type of contribution you make (before-tax or after-tax), how old you are, your total super balance, and how much you or your employer has already put in your super. Our fact sheet Opportunities and limits for super contributions has full details on how much you can put into super.
What is the maximum super contribution for 2022?
This table shows the maximum amounts you can contribute to super for the 2022–23 financial year:
| Contributions | Annual limit (cap) 2022–2023 |
|---|---|
| Before-tax (concessional), including: • employer contributions • salary sacrifice contributions • personal contributions for which you can claim an income tax deduction. |
$27,500 per financial year. You can (if eligible) carry forward unused amounts of the concessional contributions cap on a rolling basis for 5 years. After 5 years, any unused amounts will expire. See our fact sheet Salary sacrifice and save for full eligibility criteria. |
| After-tax (non-concessional), including spouse contributions. | $110,000 per financial year or up to $330,000 (depending on your total super balance at 30 June 2022) over a 3-year period using the bring-forward rule (if eligible). You can only make non-concessional contributions if your total super balance at 30 June 2022 is $1.7 million. See our fact sheet Opportunities and limits for super contributions for full details. |
Need help?
If you’d like to talk through these changes and how they affect you, you can book a time to chat with one of our Super Specialists. Either book online or call us on 1300 133 177 to arrange an appointment.
