Age Pension changes from 1 July
The Age Pension eligibility age went to 66.5 years for people born between 1 July 1955 and 31 December 1956 inclusive. It will go to 67 on 1 July 2023.
There was an increase to income and asset limits in the annual indexation measures applied to the means tests. Pensioners receiving a part rate benefit from the increase because the amount of income and assets allowed before their payment is affected has risen.
The income-free limit for singles receiving the Age Pension, Disability Support Pension and Carer Payment increased by $2 to $180 per fortnight, which increased their payment by $1 per fortnight, and for couples combined to $320 per fortnight – a $4 increase.
Assets thresholds also increased. A pensioner couple who own their home can now have up to $405,000 (excluding the home) before it affects their rate of payment, up from $401,500. That flows through to increase their payment by $10.50 per fortnight.
The disqualifying asset thresholds rose, which increases the number of Australians who may become eligible to receive a pension payment.
You can find more detail about the new payment rates and thresholds here.
Super changes from 1 July
The super guarantee increased from 9.5 per cent to 10 per cent. It will rise to 12 per cent by July 2025.
The government launched a new online fund comparison tool, YourSuper, to make it easier to choose a good fund.
The maximum number of allowable members in self-managed superannuation funds (SMSFs) and small APRA funds increased from four to six.
The annual concessional contribution cap (pre-tax salary sacrificed contributions to super) increased from $25,000 to $27,500.
The annual non-concessional cap increased from $100,000 to $110,000 (after-tax savings added to super). For people aged 65 and 66, the bring-forward arrangements were extended for all contributions made on or after 1 July 2020.
The total super balance and the transfer balance cap both increased from $1.6 million to $1.7 million.
Super products must meet an annual performance test. Products that fail will be required to inform members and those that consistently underperform will no longer be able to take on new members. Members will be notified by 1 October 2021 if their fund fails this test.
Trustees must act in the best financial interest of members and provide better information on how they manage and spend members’ savings in advance of Annual Members’ Meetings and through enhanced Portfolio Holdings Disclosure.
From 1 November 2021, your super fund will follow you to new employment. This has been dubbed ‘stapling’ and will avoid the creation of unintended multiple super accounts when employees change jobs.
If you’re doing your own tax return, 1 November is the very latest you can lodge it. You usually have until 31 October, but this year that falls on a Sunday so you have an extra day to file. And if a tax agent is doing your tax, you have until this day to file with your agent. If you miss this cut-off, you risk being fined. Your tax agent has until 16 May 2022 to lodge on your behalf.
Were you aware of these changes to the Age Pension and super? Do you do your own tax return? Why not share your tips in the comments section below?
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Disclaimer: All content in the Retirement Affordability Index is of a general nature and has been prepared without taking into account your objectives, financial situation or needs. It has been prepared with due care but no guarantees are provided for the ongoing accuracy or relevance. Before making a decision based on this information, you should consider its appropriateness in regard to your own circumstances. You should seek professional advice from a financial planner, lawyer or tax agent in relation to any aspects that affect your financial and legal circumstances.