P3 Financial Planning Budget Overview

Please note, not yet passed, we will await updates on Royal consent and note that particulars & specifics contained here may possibly be subject to change. Note that I’ve highlighted in Italics our commentary/thoughts on these particular measures.

Key initiatives include:


  • From 1 July 2022, the work test will no longer be required to be met by individuals aged 67 to 74 for voluntary contributions into their super. – Although providing more flexibility this does offer even greater confusion for those looking to make Superannuation contributions over in this stage of life, particularly if no advice is being sought.  The types of contributions one can make here are salary sacrifice, and Non-concessional contributions, (possibly even under the bring forward rules).  However it would seem that the work test will still linger since it will be required, should one make personal deductible contributions.  Another layer of complexity to an already massively confusing area – Super contributions.  We can help you’re your financial year contributions early enough in a Financial year so that you are proactively addressing your opportunities.
  • From 1 July 2022, the Government proposed to extend the ability to make downsizer contributions to those age 60 and over. Currently only those age 65 and over at the time of making the contribution are eligible. – It makes sense that this type of contribution gains more scope and flexibility.  It seems to address a social good, with the thought this helps free up larger homes for younger families. 
  • The Government will remove the current $450 per month minimum income threshold, under which employees do not have to be paid the superannuation guarantee by their employer. The Government expect this measure will take effect from 1 July 2022.
  • No changes to SGC rate which will increase to 10% from 1/07/2021 and then gradually to 12% by 30 June 2026.
  • Relaxation of residency status for SMSF and small APRA fund trustees – this potentially brings SMSF and small APRA funds more in line with large APRA funds by levelling the playing field regarding control /contributions for Trustees/Members that may temporarily work, or study overseas. 

Social Security

  • The Government will improve the Pension Loan Scheme (that can help you boost your retirement income by unlocking capital in your real estate assets) by introducing a ‘No Negative Equity Guarantee’ for the loans and allowing people to access a capped advance lump sum payment. – for those who recall or have experience with Reverse mortgages, this no negative equity concept was a key attribute that many lenders offered as sweeteners in what used to be a rather competitive market.  Will be intrigued to find out more details on these loans, especially as it pertains to Estate Planning matters.
  • Pension loan scheme available for self funded retirees, secured against real estate. A loan up to 150% of maximum Age Pension rate  (4.5% compounded fortnightly) paid back at sale of property or death.
  • The loan can be taken as a lump sum up to 2 lump sums in any 12-month period (up to 150% of their maximum age pension)
  • Newly arrived residents waiting periods for some Social security payments such as Carer Allowance, Carer Payment, JobSeeker to become consistent 4 year period.
  • JobSeeker Rate up $50 pf from 1/04/2021, income free area to increase to $150 pf. The temporary waiver of the ordinary waiting period extended to 30/06/2021.

Aged Care

In response to the Royal Commission into Aged Care Safety and Quality, the Government announced a $17.7 billion five pillar aged care reform plan.

The Government will provide additional funding for:

– home services, including an additional 80,000 home care packages;

– residential aged care and sustainability, including a new Basic Daily Fee supplement of $10 per resident per day;

 – residential aged care quality and safety, including improving access to primary care for senior Australians;

– the aged care workforce, including upskilling the existing workforce and provide training for thousands of new aged care workers; and – regional aged care services including establishing new governance and advisory structures.

Taxation /Subsidies /Grants

  • Extension of the low,  and middle income tax offset
  • Child care subsidy increase for families with multiple children
  • $2.3 billion on mental health infrastructure and programs
  • New and extended home ownership programs for first home owners and single parents
  • First Home Super Saver Scheme. Maximum releasable amount will be $50k plus associated earnings. Eligible contributions from 1/07/2017.
  • Opportunity to exit some legacy products for some clients such as pre-2007 asset exempt income streams (Market linked life expectancy and lifetime products). Eligible clients will be able to commute the funds into accumulation fund. Social Security cost should be considered as they lose asset exemption status.
  • SMSF and SAFs member residency rules change from 1/07/2022

Small business incentives

  • Extension of temporary full expensing and loss-carry back providing immediate deductions for business investment in capital assets
  • Introduction of a ‘patent box’ offering tax concessions on income derived from medical and biotech patents
  • Tax and investment incentives for the digital economy

Before acting on any of the information contained in this presentation you should obtain personal advice from a specialist investment or risk professional, which is appropriate to your specific investment or risk needs, objectives and financial situation.