As we approach the end of another year it is perhaps timely to look back over what has happened in 2022.
2022 was punctuated with some significant local and global events including:
- The passing of Queen Elizabeth II and the succession of King Charles III
- The end of lockdowns (in Australia) and the relaxation of many of the restrictions imposed during the pandemic
- Election of a new Australian federal government
- Not one, but two federal budgets
- Rapidly increasing inflation accompanied by rising interest rates
- Volatility in investment markets
- Increased geo-political tensions in Europe
- Civil unrest because of continued lockdowns in China
- The glimmer of a thawing in China’s relationship with Australia
- Donald Trump’s announcement he will seek the Republican nomination for the 2024 presidential election.
While there have been many significant events, there has been some good news on the home-front for many when it comes to our personal financial well-being, particularly in the superannuation and social security space.
Let’s look at a few of the recent changes:
The SG rate increased to 10.5%, and the minimum income threshold of $450 per month was removed from 1 July 2022.
First home super saver scheme
The maximum amount of voluntary contributions that can be withdrawn under the scheme increased from $30,000 to $50,000 from 1 July 2022.
The age limit was reduced from 65 to 60 effective from 1 July 2022, and from 60 to 55, effective from 1 January 2023.
The work test requirement for super contributions for people aged from 67 to 75 was removed, except for personal tax-deductible contributions from 1 July 2022.
Commonwealth Seniors Health Card
The income threshold for the Commonwealth Seniors Health Card was increased significantly to $90,000 (singles) and $144,000 (couples) from 4 November 2022.
A temporary increase (from $7,800 to $11,800 per year) in the amount of income age pensioners can earn from employment or self-employment without it affecting their pension from 1 December 2022 and applies until 31 December 2023.
Pension and concession cards
Pensioners who have their age pension reduced to $0 because of employment income will have their pension suspended for up to two years, rather than it being cancelled. This will save them having to reapply for the pension once the extra income stops (if within two years). Affected pensioners will also retain their concession card for up to two years. This change takes effect from 1 January 2023.
Home sale exemption
From 1 January 2023, pension and income support recipients that sell their main residence will have the amount of sales proceeds they set aside for purchasing a replacement home excluded from the assets test for a period of up to 24 months, instead of the current 12 months.
In addition, the amount excluded will be subject to the lower deeming rate for the income test, currently 0.25%
Deeming rate frozen
The lower deeming rate of 0.25% and higher rate of 2.25% are both frozen until 30 June 2024. This took effect from 1 July 2022.
So, what will 2023 bring?
We have the next Federal Budget due in May 2023 and we expect there may be some further changes to superannuation. But what will they be? Only time will tell.
As we close off for 2022, let me leave you with the words from the late John Lennon:
“A very Merry Christmas
And a Happy New Year
Let’s hope it’s a good one
Without any fear”
We wish all our readers a safe and happy Christmas.
See you in next year.
By Peter Kelly on 7 December 2022
PK believes people have the right to accurate, affordable and unbiased information that addresses all aspects of their preferred retirement lifestyle, thereby giving them the opportunity to make informed decisions that will empower them to live out their lives with dignity, certainty and security.
Tealey’s ambition is to change how people think about their retirement, he wants people to dream, plan and realise retirement is not defined by a magical age prescribed by the legislation.