08 Mar

Newsletter – March 2022

1. First Home Super Saver Scheme

The First Home Saver Scheme (FHSS) allows individuals to save money for their first home, inside their superannuation fund.  The FHSS helps first home buyers save faster with concessional tax treatment of superannuation. 

From 1 July 2017, individuals can make voluntary concessional (before tax) and voluntary non-concessional (after tax) contributions into their superannuation fund to save for their first home.   Then from 1 July 2018, individuals can apply to release their voluntary contributions, along with associated earnings, to help with the purchase of their first home.

Individuals can use the FHSS scheme if you’re a first home buyer and both of the following apply:

  • You will occupy the premises you buy, or intend to as soon as practicable.
  • You intend to occupy the property for at least six months within the first 12 months you own it, after it is practical to move in.

Individuals can currently apply to have a maximum of $15,000 of voluntary contributions from any one financial year included in the eligible contributions to be released under the scheme, to a maximum of $30,000 contributions across all years.  Earnings relating to those contributions will also be released.

As part of the 2021–22 Federal Budget, the Australian Government announced it will make changes to the First Home Super Saver (FHSS) scheme to increase the contributions that can be counted towards the maximum releasable amount.  From 1 July 2022, the amount of eligible contributions that can count towards the maximum realisable amount across all years increased from $30,000 to $50,000. 

You have to meet the following eligibility requirements to apply for the release of these amounts:

  • Must be 18 years or older
  • Never owned property in Australia (including an investment property, vacant land, commercial property, lease of land in Australia or a company title interest in land in Australia.
  • Not previously made a FHSS release request under the FHSS scheme.

Eligibility criteria is assessed on an individual basis, which means that couples, siblings, or friends can each assess their own eligibility to purchase the same property. 

You may still be eligible for FHSS release if you have previously owned property in Australia, under the financial hardship provisions if the ATO determines that you have suffered a financial hardship that resulted in loss of ownership of your property interests, such as bankruptcy, divorce, loss of employment, illness, natural disasters etc.  Individuals need to apply via their myGov account or by completing a FHSS hardship application form.

2.      Downsizer contributions

As part of the 2021–22 Federal Budget, the Australian Government announced it will reduce the eligibility age for downsizer contributions from 65 to 60 years old. This measure has now become law.

From 1 July 2022, eligible individuals aged 60 years or older can choose to make a downsizer contribution into their superannuation of up to $300,000 per person ($600,000 per couple) from the proceeds of selling their home.

For contributions made prior to 1 July 2022, eligible individuals must still be aged 65 years or older at the time of making their contribution.

To be eligible for the downsizer contribution, you must answer yes to all the following:

  • you have reached the eligible age at the time you make a downsizer contribution. The current eligible age is 65 years old, but will be 60 years old from 1 July 2022. There is no maximum age limit.
  • your home was owned by you or your spouse for 10 years or more prior to the sale.  The ownership period is generally calculated from the date of settlement of purchase to the date of settlement of sale.
  • your home is in Australia and is not a caravan, houseboat, or other mobile home.
  • the proceeds from the sale of the home are either exempt or partially exempt from capital gains tax (CGT) under the CGT main residence exemption, or would be entitled to such an exemption if the home was a CGT rather than a pre-CGT asset (acquired before 20 September 1985)
  • you provide your super fund with the “Downsizer contribution into super form” NAT75073 either before or at the time of making your downsizer contribution.
  • you make your downsizer contribution within 90 days of receiving the proceeds of sale, which is usually at the date of settlement.
  • you have not previously made a downsizer contribution to your super from the sale of another home or from the part sale of your home.
  • If your home was only owned by one spouse and was sold, the spouse that did not have an ownership interest may also make a downsizer contribution, or have one made on their behalf, provided they meet all of the other requirements.

3.      Re-contribution of COVID-19 early release superannuation amounts

If you withdrew money from your super fund through the COVID-19 early release of super program, you can rebuild your super by making personal super contributions.  In the instance where these re-contributions exceed your non-concessional contributions cap, you can have the contributions treated as ‘re-contributions’, which are excluded from the contribution cap.

In general, non-concessional contributions (NCC) are personal super contribution you make to your fund out of money that you have already paid tax on and you do not claim a tax deduction for it.  These contributions count towards your NCC cap.

Non-concessional contributions you make up to the amount you released under the COVID-19 early release will not count towards your NCC cap.   If the re-contribution means that you will be close to exceeding your NCC cap for the year, you may choose to access the measure by completing and lodging a “Re-contribution form”. 

If the re-contribution will not lead to you exceeding your NCC cap for the year, you will not need to complete the form.

Please note that the re-contribution will count towards your transfer balance cap, which applies when you move your super into retirement phase, and it will also count towards your total super balance (TSB) when it is recalculated to include all your contributions on 30 June at the end of the financial year.

Eligibility:

You will be eligible to make a re-contribution of COVID-19 early release amounts to super if you can answer yes to all of the following:

  • you accessed superannuation amounts through the COVID-19 early release super program.
  • the total amount, including any previous COVID-19 recontributions, you are re-contributing is equal to or less than the total amount you accessed through COVID-19 early release
  • you can provide the approved form notifying your fund of the re-contribution on or before the time when the contribution is made
  • you re-contribute the amounts to your fund between 1 July 2021 and 30 June 2030
  • you are not claiming a deduction in your income tax return for amounts you re-contribute

If you meet the eligibility criteria, you can make a re-contribution up to the amount you accessed through COVID-19 early release.  You can also make multiple re-contributions, but the total of all your re-contributions cannot exceed the total amount you withdrew through the COVID-19 early release program.

Before you choose to treat your contribution as a re-contribution, you should check your NCC cap to see if you will be likely to exceed it the year you made the contribution (and complete the re-contribution form if you’re going to exceed the cap).  You should also check with your superfund that they will accept these contributions.

You will need to complete the Notice of re-contribution of COVID-19 early release amounts (NAT 75394) form if you choose to make a re-contribution. You need to provide this to your super fund before or at the time when you make your contribution.

One form can be used to cover multiple re-contribution amounts to a single fund in one financial year. If you make re-contributions to multiple funds, you will need to complete separate forms with each fund for each financial year.

4.      Single Touch Payroll (STP)

The ATO has begun the process of identifying small employers (19 or fewer employees) to determine if they commenced STP reporting or not.  The ATO has also began to issue failure to lodge penalties for small employers that failed to meet the STP reporting deadline. 

Single Touch Payroll (STP), is an Australian Government initiative to reduce employers’ reporting burdens to government agencies.   Employers are required to report employees’ payroll information to the ATO each time they make payments, via STP-enabled software.  Payroll information to be reported includes:

  • salaries and wages
  • pay as you go (PAYG) withholding
  • superannuation

STP started on 1 July 2018 for employers with 20 or more employees and 1 July 2019 for employers with 19 or fewer employees and is a mandatory obligation.  The ATO did provide several concessions to certain businesses or industries however, the concessions ended on 1 July 2021.  If you haven’t started reporting through STP, you need to start reporting as soon as possible as penalties may apply.

5       Director ID

All directors of a company, registered Australian body, registered foreign company or Aboriginal and Torres Strait Islander corporations are now required to obtain a director ID.

You can apply for a director identification number (director ID) online at Australian Business Registry Services (ABRS).  Timing of when you need to apply by depends on when you became a director.

  • If you are appointed between 1 November 2021 and 4 April 2022, you need to apply within 28 days of your appointment. After this period, you will need to apply before being appointed as a director.
  • If you were appointed on or before 31 October 2021, you have until 30 November 2022 to apply for your DIN.

Applications are made using your own myGovID app. If you haven’t already set up your myGovID, you will need to set up a Standard or Strong identity strength to access this service. You will need to apply for your DIN yourself to verify your identity.  The application cannot be done by anyone else (eg your authorised tax agent or ASIC agent).

6.      Important lodgement due dates

16 March 2022Half year accounts for listed entities for the period ended 31 December 2021
31 March 2022Tax return for individuals and trusts whose latest return resulted in a tax liability of $20,000 or more (excluding large/medium trusts).
28 April 2022Superannuation Guarantee payment for the quarter ending 31 March 2022
29 April 2022Quarterly reports for listed entities for the quarter ending 31 March 2022
30 April 2022Deadline to lodge R&D activities for the year ended 30 June 2021.
15 May 2022Tax returns for the year ended 30 June 2021 for all remaining individuals and trusts not required earlier and not eligible for the 5 June concession (including new registrations).
21 May 2022FBT returns for year ended 31 March 2022 due for lodgement and payment.

7.      Upcoming dividends

CompanyDate            $% Franked
JB Hi Fi11-Mar-22         1.63100%
Amcor15-Mar-22         0.170%
Lendlease16-Mar-22         0.050%
REA Group22-Mar-22         0.75100%
Woodside23-Mar-22         1.46100%
ASX23-Mar-22         1.16100%
IAG24-Mar-22         0.060%
BHP28-Mar-22         2.08100%
Bluescope29-Mar-22         0.250%
Commonwealth Bank30-Mar-22         1.75100%
Wesfarmers30-Mar-22         0.80100%
AGL30-Mar-22         0.160%
Fortescue Metals30-Mar-22         0.86100%

If you wish to discuss any of the above matters, please contact our office.