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Colin Brinsden, AAP Economics and Business Correspondent
(Australian Associated Press)
Treasurer Josh Frydenberg’s third budget aims to assist low paid workers and older Australians save for their retirement, while offering an incentive for those looking to downsize their home when they reach 60.
From July 1 next year, the $450 per month threshold for compulsory superannuation will be removed, meaning employers will have to pay super to low paid workers, such as part-time staff and casuals.
The federal government’s recent retirement income review estimated such an initiative would see about 300,000 individuals receive additional super guarantee payments each month, 63 per cent of whom are women.
From the same date, the government will allow individuals aged 67 to 74 years to make or receive non-concessional or salary sacrifice superannuation contributions without meeting the so-called work test.
Currently, individuals in this age bracket can only make voluntary contributions or receive contributions from their spouse if they are working at least 40 hours over a 30-day period in the relevant financial year.
“Removing the requirement to meet the work test when making non-concessional or salary sacrifice contributions will simplify the rules governing superannuation contributions and will increase flexibility for older Australians to save for their retirement through superannuation,” the budget papers say.
Also from July 1, 2022, the government will reduce the eligibility age from 65 to 60 for those wishing to make contributions to their super from downsizing to a smaller home.
The downsizer contribution allows people to make a one-off, post-tax contribution to their super of up to $300,000 per person from the proceeds of selling their home.
Both members of a couple can contribute in respect of the same home.
“This measure will allow more older Australians to consider downsizing to a home that better suits their needs, thereby freeing up the stock of larger homes for younger families,” the budget papers say.