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Federal Budget update

Superannuation  |  12/05/2021  |   10 min read

On Tuesday, 11 May 2021, the Federal Government released the 2021-22 Budget. To help you understand what the Budget may mean for you and your finances, we’ve created a summary of some key changes including those proposed and not as yet legislated, including:

  • Greater access to super for low-income workers
  • Buying a home for first home buyers and single parents
  • Downsizer contribution changes for people over age 60
  • Work test changes for people who are age 67-74
  • Improvements to the Pension Loan Scheme

Low-income workers gain access to super

Currently, all employees who earn more than $450 per month receive a super contribution from their employer of 9.5% of their salary. This is called the Superannuation Guarantee.

From 1 July 2022, the Government will remove the current $450 per month minimum income threshold for employers to pay their employees super. This means that all workers who earn up to $450 per month will receive super from 1 July 2022.

The Super Guarantee rate will increase to 10% on 1 July 2021. Further legislated changes are planned to increase to 10.5% on 1 July 2022.

Buying a home

From 1 July 2021, the Government is providing more opportunities to purchase a home.

First home buyers

  • From 1 July 2021, the Government has agreed to continue the First Home Loan Deposit Scheme and provide an additional 10,000 places each year for eligible people buying their first home (new or existing).
  • From 1 July 2021, the First Home Super Saver Scheme (FHSSS) will increase from $30,000 to $50,000.

Single parents with dependants

  • From 1 July 2021, the Government will offer 10,000 opportunities to purchase a new or existing home (regardless of if it is a first home or not) with a deposit of 2% or more.

Downsizer contributions

It is proposed that from 1 July 2022, the minimum age for downsizer contributions will be age 60 and older. Currently, only those who are age 65 and older at the time of contributing are eligible. This means that if you sell your main residence that you’ve owned for 10 years or more, you can make a one-time post-tax contribution to your super of $300,000 per person or $600,000 as a couple. Your sale proceeds must be either fully or partially exempt from capital gains tax under the main residence exemption and the downsizer contribution must be made within 90 days of receiving the sale proceeds. These contributions don’t count towards your concessional and non-concessional contribution caps.

Amending work test

From 1 July 2022, it is proposed that, the work test will no longer be required by individuals age 67 to 74 for voluntary contributions like non-concessional contributions and salary sacrifice contributions. However, if you fall into this age range, you will still need to meet the work test requirements if you wish to make personal deductible contributions. Currently, you would need to meet a work test or be eligible for a work test exemption before you can make voluntary contributions to your super.

If you’re aged between 65 to 74, you will also be able to use the bring forward rule subject to the available caps and meeting the total super balance criteria. Currently, only those who are under the age of 65 on 1 July of a financial year can use the bring forward rule in that financial year. The measure that was originally announced in the 2019-20 Federal Budget to extend this age from 65 to 67 (effective 1 July 2020) has not yet been legislated. 

Pension Loan Scheme (PLS)

The PLS is a voluntary, reverse mortgage loan to assist older Australians who need to access equity for retirement from real estate assets such as a home or other property.

From 1 July 2022, the PLS will be improved and includes the following:

  • A fortnightly loan of up to 150% of the maximum rate of Age Pension to help boost a person’s retirement income by unlocking capital in their real estate assets.
  • Borrowers under the PLS, will not owe more than the market value of their property.
  • Eligible people will be able to access up to two lump sum advances in any 12-month period, up to a total value of 50% of the maximum annual rate of Age Pension (currently $12,385 for singles and $18,670 for couples).

If you’d like to learn more about these changes, you can access more details in the full version of the 2021-22 Federal Budget.


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This information is provided for general information only. It does not take into account your personal objectives, financial situation or needs and should therefore not be taken as personal advice. You should consider whether it is appropriate for you before acting on it and, if necessary, you should seek professional financial advice. Togethr Trustees Pty Ltd ABN 64 006 964 049, AFSL 246383 ("Togethr") is the trustee of the Equipsuper Superannuation Fund ABN 33 813 823 017 ("Equip" or "The Fund"). Past performance is not a reliable indicator of future performance.

Togethr Financial Planning Pty Ltd (“TFP”) (ABN 84 124 491 078, AFSL 455010), trading as Equip Financial Planning, is licensed to provide financial planning services to retail and wholesale clients. TFP is owned by Togethr Holdings Pty Ltd (ABN 11 604 515 791). You can obtain the TFP Financial Services Guide and/or Privacy Statement by contacting our Helpline on 1800 682 626. This is general information only and does not take into account your personal objectives, financial situation or needs and therefore should not be taken as personal advice.

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