IMPORTANT Superannuation rule changes from JULY 2021 (super guarantee increase, YourSuper tool)

As part of the 2020-21 federal Budget, the government announced the Super Reforms - Your Future, Your Super bill which has passed through parliament and is now part of the law.
Beginner's guide to superannuation: • Superannuation in Aust...
Industry vs Retail super: • Industry vs Retail Sup...
Salary Sacrifice: • Salary Sacrifice in Au...
YourSuper comparison tool: www.ato.gov.au/Calculators-an...
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On 1 July 2021, the superannuation guarantee which is the the amount of super paid by an employer to an employee on top of wages has increased from 9.5% to 10%It’s set to increase by 0.5% every financial year until hitting 12% in FY25/26
A recent study by Colonial First State found that on a hypothetical $100,000 salary, a 35-year-old with a current balance of $100,000 would be more than $86,000 better off in retirement thanks to the new increase.
From 1 November 2021, when an employee starts a new job but does not nominate a super fund to receive contributions, their employer is required to make contributions to their existing super fund, if they have one.This change is being referred to as stapling because the fund will “stapled” to you, following you from job to job. The goal of this reform is to reduce the number of people who have multiple super accounts. Having multiple super accounts means you are paying multiple fees and this eats away at your retirement savings.It’s important to note that employees can always choose which fund their super contributions are paid into, which means they can switch from their existing fund to a new one.
The government has introduced a new online super comparison tool in order to provide more transparency for Aussies when it comes to super funds.The YourSuper comparison tool is being run by the ATO and is currently live, I’ll leave a link down below.
Right now, this tool:
- displays a table of 80 MySuper products ranked by fees and net returns (updated quarterly)- allows you to select and compare in more detail up to four MySuper products at a time
- it also can show where your current super accounts rank compared to the other MySuper products - but you will need to access the personalised version of the tool through myGov portal
And from September 2021, the tool will show the annual performance of each super fund as assessed by APRA. Until then, all funds will show as “Not assessed” in the Investment Performance column.
Another important feature of the Your Future, Your Super reforms is that super funds will face annual performance tests conducted by the Australian Prudential Regulation Authority (APRA).
Funds that underperform will be listed on the YourSuper comparison tool I mentioned earlier until their performance improves, and those that fail two consecutive annual underperformance tests won’t be permitted to accept new members until their performance improves. The first performance review is due by October 2021.
On 1 July 2021, the concessional (before-tax) super contribution cap increased from $25,000 to $27,500 and the non-concessional (after-tax) contribution cap increased from $100,000 to $110,000.
There were some additional changes to super announced as part of the Federal Budget 2021 but have not yet been legislated into law.
From 1 July 2022, the maximum withdrawal from the First Home Super Saver Scheme will increase from $30,000 to $50,000
Also from 1 July 2022, the eligibility age for the Downsizer Scheme will be lowered from 65 to 60 years.
The Downsizer Scheme allows eligible people who sell their home to make a one-off, $300,000 contribution to their super, outside the usual concessional and tax rules.
From 1 July 2022, the $450 monthly earnings threshold for superannuation contributions will be removed. This change means that employers will be required to pay the superannuation guarantee on the wages of employees’ earning less than $450 per month.