Changes affecting members from 1 July 2023
As the new financial year rolls in, there are some notable changes with effect from 1 July 2023. Here, we outline the key updates and how they may affect you.
Changes to super
SUPER GUARANTEE RATE TO INCREASE
The super guarantee (SG) rate will increase from 10.5% to 11%, effective 1 July 2023. If there are no future delays, the SG rate is on track to increase to 12% by 2025. You can check these payments in the ‘Account activity’ section of MemberOnline.
MINIMUM PAYMENT LIMITS ARE CHANGING
The government has now ended the temporary 50% reduction to the minimum payment limits for pension and transition to retirement (TTR) accounts. This temporary reduction was implemented in 2020 due to the COVID-19 pandemic. This means the minimum percentage of your account balance that you must withdraw each year will increase.
The temporary minimum payment limits that applied for the 2022/23 financial year are shown below, as well as the default minimum rates which will apply from 1 July 2023.
|Your age||Temporary minimum limit
(ends 30 June 2023)
|Default minimum limit
(applies from 1 July 2023)
|65 to 74||2.50%||5%|
|75 to 79||3%||6%|
|80 to 84||3.50%||7%|
|85 to 89||4.50%||9%|
|90 to 94||5.50%||11%|
|95 and over||7%||14%|
TRANSFER BALANCE CAP WILL INCREASE
The transfer balance cap will increase from $1.7m to $1.9m, effective from 1 July 2023. The increase of $200,000 in the cap is due to indexation. This cap is the maximum amount (when you reach your preservation age) you can transfer from your super account (where your money is invested while you’re working) to your pension account (where you can access and use your money in retirement).
TOTAL SUPER BALANCE CAP INCREASES
Your total super balance (TSB) is the total balance of all your super and retirement accounts at 30 June each year. From 1 July 2023, the TSB cap will increase from $1.7m to $1.9m. If your super balance exceeds the TSB, no further non-concessional contributions can be made in the following financial year without exceeding the non-concessional contributions cap.
GOVERNMENT CO-CONTRIBUTION THRESHOLDS INCREASE
The government’s co-contribution scheme is an incentive to help lower-income earners save for retirement, by providing eligible recipients with a boost of up to $500 to their super. From 1 July 2023, the co-contribution total income threshold will increase from $42,016 – $57,016 to $43,445 – $58,445. If you’re keen to add a boost to your super with a government co-contribution, you can learn more here.
Other important changes for retirees
INCREASE TO LOW-RATE CAP
If you’re between your preservation age and age 60 and retired, from 1 July 2023, the amount of taxable super you can withdraw without paying tax will increase from $230,000 to $235,000. This is good news, as less tax means more money in your pocket. For more information, visit the ATO.
DEEMING RATES TO INCREASE
Deeming rates are used by Centrelink to help determine Age Pension eligibility and calculate fortnightly payments – a shortcut rate used by Centrelink to calculate (income) earnings on financial assets. These include things like super balances, account-based pension amounts, bank balances and shares.
Deeming rates are increasing:
- Singles 0.25% on assets up to $60,400 and 2.25% on assets above that amount
- Couples (combined where at least one of you receive a pension) 0.25% on assets up to $100,200 and 2.25% on assets above that amount.
For more information on deeming rates and how they impact your Age Pension payment, visit Services Australia.
Keeping you informed
We keep you up-to-date with all things super via f.ind, our eNewsletter. To receive online updates about super, log in to MemberOnline, select ‘Personal details’ from the drop-down menu at the top right of the Dashboard. You can ensure we have your correct email address. Scroll down to Communications preferences and click on the View/update communications preferences button. From there you can choose to receive super updates by email.
If you have questions about your super or pension account, you can contact us on 1300 360 149.