Superannuation rates and thresholds for 2021-22

Thomson Reuters has used the latest AWOTE details (ABS Catalogue no: 6302.0) to calculate the following superannuation rates and thresholds for 2021-22 in accordance with Subdiv 960-M of the ITAA 1997.

Contribution caps

The concessional contributions cap is set to increase to $27,500 for the 2021-22 financial year (up from $25,000 since 2017-18). This cap was reset in the legislation at $25,000 from 2017-18 as part of the super reforms that reduced the contribution caps. As the concessional cap is now only indexed in $2,500 increments, the AWOTE index number of 1,711.60 for the quarter ending on 31 December 2020 was (finally) sufficient to trigger an increase to $27,500 for 2021-22.

The non-concessional contributions cap (which is set at 4 times the concessional cap) is $110,000 for 2021-22 (or $330,000 under the bring-forward rule over 3 years, subject to the other eligibility requirements).

The CGT cap amount for non-concessional contributions is $1.615m for 2021-22 (up from $1.565m).

Co-contributions

The Government co-contribution "lower income threshold" is $41,112 for 2021-22 (up from $39,837 for 2020-21); "higher income threshold" is $56,112 (up from $54,837).

Super guarantee

While the current super guarantee (SG) rate is already legislated to increase from 9.5% to 10% from 1 July 2021, the "maximum contribution base" will rise to $58,920 per quarter for 2021-22 (up from $57,090 for 2020-21).

An employer is not required to provide the minimum super guarantee support for that part of an employee's ordinary time earnings (OTE) above the quarterly maximum contribution base (ie $58,920 for 2021-22). This quarterly maximum represents a per annum equivalent of $235,680 for 2021-22).

Super benefits

The following indexed thresholds apply for 2021-22:

• Superannuation lump sum low rate cap - $225,000 (up from $215,000);
• Untaxed plan cap - $1.615m (up from $1.565m);
• ETP cap amount - $225,000 (up from $215,000);
• Genuine redundancy and early retirement payments - tax-free amounts: base amount - $11,341 (up from $10,989); service amount - $5,672 (up from $5,496).

Pension cap

As previously reported at 2021 WTB 4 [61], the general transfer balance cap, which is indexed to CPI, is set to increase from $1.6m to $1.7m on 1 July 2021. When the general transfer balance cap is indexed to $1.7m from 1 July 2021, there won't be a single cap that applies to all individuals. Rather, every individual will have their own personal transfer balance cap of between $1.6m and $1.7m, depending on their circumstances: see 2021 WTB 4 [61].

The "total superannuation balance" threshold for making non-concessional contributions will also increase from $1.6m to $1.7m from 2021-22. When the general transfer balance cap is indexed on 1 July 2021, individuals with a total superannuation balance of $1.7m or more on 30 June 2021 won't be eligible for the bring forward arrangements from 1 July 2021.

This article first appeared in Thomson Reuters' Weekly Tax Bulletin (2021 WTB 8 [138]).

More Cleardocs information on related topics

You can read earlier ClearLaw articles on a range of superannuation topics here.

• ATO issues confirmation that LRBAs do not contravene super law
• Your SMSF Investment Strategy and COVID-19
• SMSFs and property development ? why is the ATO concerned?
• Leasing during lockdown - land tax and payroll tax relief during COVID-19
• ATO releases 'safe harbour' guidelines for certain superannuation borrowings
• Total superannuation balances now include outstanding LRBA balances
• SMSFs and related party borrowings - ATO clarifies scope of non-arm's length income rules

Order related document packages

• SMSF Minutes and Resolutions Package
• SMSF Pension Commutation
• SMSF Pension Pack
• Superannuation Trust (SMSF)
• Update to SMSF