As one of the three key pillars of Australia’s retirement income system, super is constantly evolving to ensure it meets the needs of both retirees, and working Australians saving for their retirement.

With that in mind, there are a couple of important changes coming to super on 1 July that you should be aware of.

For super accounts

The Superannuation Guarantee will increase

The Superannuation Guarantee (SG) will start to increase on 1 July 2021.

The SG, or the money that your employer must contribute to your super on your behalf, will rise from 9.5 to 10 percent of an employee’s ordinary time earnings this year. It will then increase by 0.5 percent each 1 July until it reaches 12 percent on 1 July 2025.

The increase is designed to ensure that our super balances keep up with the cost of living by the time current employees reach retirement, so they can enjoy a comfortable retirement.

The confirmation that the increase will kick off this 1 July follows several years of debate in the media about its necessity and, over the last year, its timing in the wake of the COVID-19 pandemic.

Originally legislated by the Gillard Government, the gradual increase was first scheduled to begin in 2015, but was put off until 2021 by the Abbott Government in 2014.

Contribution caps are rising

The amount you can contribute to your super is also increasing in the new financial year.

You can contribute to your super in two ways: from your pre-tax income, making what are called concessional contributions, or from your take-home income, making what are called non-concessional contributions.

The concessional contributions cap, which also includes the mandatory contributions made by your employer on your behalf, is increasing from $25,000 per financial year to $27,500. Meanwhile, the non-concessional cap will rise from $100,000 per financial year to $110,000.

These increases are due to indexation, a method of adjusting the value of something in line with changes in another value or indicator.

For example, the concessional and non-concessional contribution caps are indexed in line with average weekly ordinary time earnings (AWOTE). This is an indicator published by the Australian Bureau of Statistics (ABS) that measures the level of average earnings in Australia at a particular point in time.

For income accounts

Indexation of the transfer balance cap

The transfer balance cap, or the amount of money that you can transfer into the retirement phase of super, will increase on 1 July.

First introduced in the 2017-18 financial year, the general transfer balance cap is increasing from $1.6 million to $1.7 million thanks to indexation.

However, it’s important to note that different caps will apply to different people.

As explained by the ATO, every individual will have their own personal transfer balance cap of between $1.6 and $1.7 million, depending on their circumstances.

If you start a retirement income stream for the first time on or after 1 July 2021, you will have a personal transfer balance cap of $1.7 million.

If you had a transfer balance account before 1 July 2021 – that is, if you ever moved money into the retirement phase of super – your personal transfer balance cap will be:

  • $1.6 million if, at any time between 1 July 2017 and 30 June 2021, the balance of that account was $1.6 million or more
  • between $1.6 and $1.7 million in all other cases, based on the highest ever balance of your transfer balance account.

You will be able to view your transfer balance cap information via your ATO or MyGov account online.

Keep your information secure

​With super in the news, cyber criminals are carrying out phishing attacks and scams using a variety of different channels, such as email, phone or in person.

The government has put together a guide to help you spot a scam:

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