Federal Budget Briefing 2021
Recently the Federal Government handed down its Budget for the 2021-22 financial year. Compared with last year’s record deficit of $213.7 billion, the underlying cash deficit is projected to decrease to $161 billion as the economy continues on the path to recovery from Coronavirus. Some of the key Budget announcements that should be of particular interest to you and your clients include:
the removal of the work test for non-concessional and salary sacrifice contributions
a reduction in the minimum age requirement for downsizer contributions
an increase in the amount of super savings available to first home buyers
additional investment into aged care following a Royal Commission into the quality and safety of the system.
It’s important to note that the legislated increases to superannuation guarantee were not amended in the Budget. Therefore, rate of superannuation guarantee will increase to 10% from 1 July 2021, as previously legislated.
In addition, the Government did not annonce an extension of the halving of the account based pension minimums. As a result, the standard minimum drawdown requirements will apply from 1 July 2021.
Also, keep in mind that the announcements made in the Budget remain proposals at this stage. All of the proposals mentioned must be passed by Parliament before they become law.