LISTO came into effect on July 1, 2017 as a renamed version of the existing Low Income Retirement Contribution (LISR). LISTO acts as a refund of tax paid on concessional contributions that you or your employer pay into your super account if your taxable income is less than $37,000. This means that as a low-income person, you won`t pay tax on your super contributions if you qualify for LISTO. The ATO determines your eligibility. This removal of the monthly threshold means that employers are now required to make super premiums for all their employees (including casual and part-time workers), regardless of the amount they earn. The only exceptions are workers under the age of 18 who work less than 30 hours per week. The monthly income threshold of $450 for pension contributions was lifted on July 1, 2022. Under this change, employers will have to pay the pension guarantee on the wages of workers earning less than $450 per month. If you are under 18, you must work more than 30 hours per week, unless you are covered by an operating agreement that states otherwise. More information is available here. If, on the other hand, Rose was 66 or 67 years old, she cannot trigger the preferential rule because she was over 65 on July 1 of the 2020/21 financial year.
This limits the maximum amount of the non-concessional contribution without penalty to $100,000. The consolation, however, is that Rose is not required to pass the work exam unless she wants to make personal contributions during the fiscal year after reaching age 67. The age limit for paying sacrificial contributions in super contributions without having to take the work exam has also been raised from 68 to 74. This means that from 1 July 2022, eligible salary exemption schemes will be available to anyone under the age of 75 without having to pass a work audit. Other normal eligibility criteria, such as a TSB of less than $1.7 million and a sufficient cap on unused annual non-concessional contributions, continue to apply. The law also affects the operation of large superfunds. From 1 July 2021, APRA will introduce benchmarking tests for the net investment performance of MySuper products. It also reinforces the commitment of super fund trustees to act only in the best financial interest of members and to provide better information on how they manage and spend members` money. Starting in 2019-2020, exit fees will be prohibited in super funds, allowing you to change your super fund without having to pay any penalties or fees. With these measures, the Morrison government is ensuring that the pension system works stronger for all Australians by strengthening pension protections for millions of Australians. In the wake of the COVID-19 pandemic, the government has temporarily lowered the minimum super pension quotas for 2019-2020.
This means that as of March 22, 2020, the minimum annual payment from an account-based pension or similar product will be reduced by 50%. Super funds are required to inform fund members that their insurance will be cancelled and must give them the opportunity to maintain their insurance coverage even if they do not make regular super contributions. The Your Future, Your Super measures first announced in the 2021 federal budget are now enshrined in law – this also includes limiting the creation of multiple pension accounts for new employees. Starting at 1. As of July 2017, anyone under the age of 75 can claim a tax deduction for personal contributions they make up to their annual limit of $25,000 for concessional contributions. If you are between 65 and 74 years old, you must meet the requirements of the work audit. The $25,000 limit also includes employer and payroll contributions. The reforms that have come into force have been more tinkering than radical changes, and in some cases (e.g. higher age limits for voluntary contributions without a work test) represent useful simplifications that should make it easier for everyone to use – and understand – our complex supersystem. As for the super changes, they are not much bigger than the set of new rules that came into effect on July 1, 2017.
These new rules represented one of the biggest shocks to the supersystem and included: The government extended the temporary 50% cut in minimum interest rates for account-based pensions and similar products in the 2022/23 income year. The temporary reduction also applied to the financial years 2019/20, 2020/21 and 2021/22. In accordance with other increases to the contribution age limit, as of July 1, 2022, it will be possible to contribute to your spouse`s super account without you or your spouse having to meet the requirements of the work audit (or work test exemption). Other normal eligibility criteria, such as a TSB of less than $1.7 million and a sufficient cap on unused annual non-concessional contributions, continue to apply. Starting at 1. In July 2021, the federal government will ensure that all super fund trustees are more accountable and transparent about how they manage their members` retirement savings. Trustees have a new duty to act in the best financial interest of their members, they are obliged: the beginning of a new financial year always brings new rules for super funds. Sometimes there are many changes that have a great scope, and other years there are only a few. For the 2020/21 financial year, the two most important changes are: the abolition of labour auditing for all persons aged 66 and 67 who wish to make non-concessional personal contributions; and extending spousal contributions to persons aged 70 to 75. However, we are waiting for the amendment of the legislation allowing access to the « advanced » rules.