Key changes to superannuation from 1 July 2021

Another new financial year started already, let’s look at some recent changes in the superannuation system.

The single default account or ‘stapled super fund’ measure

From 1 November 2021, if a new employee doesn’t choose a super fund, the employer is required to pay the new employee’s super into the new employee’s existing stapled fund, which information can be obtained by logging onto the ATO online services.

More flexible on contributions

  • the age eligibility requirements for triggering non-concessional contributions cap bring-forward rule increased to age 67 (previously 65).
  • removing the excess concessional contributions charge (ECC). Individuals who make contributions on or after 1 July 2021 that exceed their annual concessional contributions cap will no longer be charged the ECC.
  • allowing re-contribution of COVID-19 early release super from 1 July 2021 to 30 June 2030 without being counted towards the non-concessional contributions cap.

Superannuation Guarantee rate increase

The Superannuation Guarantee (SG) employer contribution rate has increased by 0.5% to 10% from 1 July 2021. And the rate is legislated to gradually rise over the next five years:

Financial Year starting Superannuation Guarantee rate
1 July 2020 9.5%
1 July 2021 10.0%
1 July 2022 10.5%
1 July 2023 11.0%
1 July 2024 11.5%
On or after 1 July 2025 12.0%

Increase to the contributions caps from 1 July 2021

  • The concessional contributions cap has increased to $27,500 per member (up from $25,000).
  • The non-concessional contributions cap has also increased to $110,000 per member (up from $100,000)

 


Disclaimer:
Please note that this article is intended to be a general guide only, and should not be seen to constitute legal or tax advice. Where necessary, you should seek a second professional opinion for any legal or tax issues raised in your personal or business tax affairs.

Emma Zhao

Emma Zhao

Chartered Accountant | Registered Tax Agent | SMSF Speacialist™ emma@sencilloaccounts.com.au