Financial Planning

2022 Federal Election Financial Update

June 1, 2022

Financial Planning Opportunities and Changes

So we have a new government. 

The new Australian Government means new policies in a number of areas including some financial policy changes that may be relevant to you. They have also announced support for some of the policies proposed by the previous Government. 

In this article, we will cover some of the policy updates related to:

  1. Superannuation and the Downsizer Contribution
  2. Housing and First Home Buyers
  3. Centrelink Assets Test Exemption Changes from Selling Your Home 

 

1. Superannuation and the Downsizer Contribution

The previous government proposed to extend the eligibility of the superannuation downsizer contribution from the age of 65+ to 60+. 

This has been supported by the new Government. 

The eligibility age for downsizer contributions is already legislated to be reduced from 65 to 60 from 1 July 2022. It is proposed to further reduce the eligibility age to those aged 55 and over. 

Additionally, the ongoing Super Guarantee increase has also been supported by the new government and will continue to increase as previously proposed (table below).

Superannuation Guarantee rate (2002 to 2026 and beyond)

PeriodSuper Guarantee Rate
1 July 2002 – 30 June 2013 9.00%
1 July 2013 – 30 June 2014 9.25%
1 July 2014 – 30 June 2021 9.50%
1 July 2021 – 30 June 2022 10.00%
1 July 2022 – 30 June 2023 10.50%
1 July 2023 – 30 June 2024 11.00%
1 July 2024 – 30 June 2025 11.50%
1 July 2025 – 30 June 2026 and onwards 12.00%
Source: ATO

 

2. Housing and First Home Buyers

The new government has addressed the housing affordability issues that many Australians and first home buyers are facing. 

There are already a number of schemes and policies that are in place to support first home buyers including The First Home Loan Deposit Scheme which allows first home buyers to purchase a home with only a 5% deposit without having to pay LMI.

The new government is supportive of this scheme and has extended the financial support to regional areas in Australia also. 

Additionally, the new Government have announced a new scheme called “Help to Buy”. This scheme will be available to 10,000 Australians every year to help them overcome housing affordability problems. The scheme cuts the cost of buying a home by up to 40%, with the government making an equity contribution of up to 40%.

 

3 Centrelink Assets Test Exemption Changes from Selling Your Home

Proposed by the previous government and supported by the new government, the Centrelink Assets test proposed changes will further exempt the income from selling your home for another 12 months (it is currently already exempted for 12 months).

This change may be particularly important for retirees and pre-retirees. 

As a retiree, the home you live in is not considered an ‘asset’ and is therefore exempt from the Centrelink assets test. This means the value of your home will not affect the amount you receive from the age pension.

However, if you decide to sell your home, this could affect your age pension payments.

If you intend to buy another home within 12 months of selling your home, then the portion of the sale proceeds that will be put towards the purchase of the new home will be exempted under the assets test for up to 12 months.

The government is proposing to extend this timeframe to a total of 24 months. 

There are currently no proposed changes to the income test.

Need financial advice?

With a new government comes many changes. If you’re concerned that your current financial strategies may be affected by new changes, please reach out to our financial planning team at Cambio Group.

Our team is experienced in navigating changing financial circumstances and can help you plan for financial success!

Disclaimer: The information (including taxation) in this website does not consider your personal circumstances and is of a general nature only – unless otherwise stated. You should not act on the information provided without first obtaining professional advice specific to your circumstances.

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