Federal Budget 2022/23 – a focus on relieving cost of living pressures
On Tuesday, 29 March 2022, the Federal Government handed down its budget for 2022/23. As anticipated, the budget focused on measures to ease cost of living pressures for Australian households.
When it comes to your super, there were no significant changes included in the budget.
Read on for our summary of the key announcements.
Key measures affecting your super and finances
Super guarantee payments on track to rise to 12%
In positive news for our members, there wasn’t a change to the legislated superannuation guarantee (SG) rise from 10% to 10.5% on 1 July 2022. If there are no future delays, the SG rate is on track to increase to 12% by 2025 and will continue to provide members with a gradual boost to their super balances.
Pension minimum drawdown rates extended again
Aimed at supporting retirees, the government has again extended the 50% reduction of the minimum payment limits for pension members until 30 June 2023.
This change means pension members can continue to draw a lower amount which may help to maintain their capital in the current environment of geopolitical and economic uncertainty.
We’ve shown the temporary minimum income limits in the table below
|65 to 74||2.5%|
|75 to 79||3%|
|80 to 84||3.5%|
|85 to 89||4.5%|
|90 to 94||5.5%|
|95 and over||7%|
Pension members, you can view and update your pension payment amount and frequency in MemberOnline. We’ll also write to you in the coming months to provide an update on your pension payment limits for the 2022/23 financial year.
Relieving cost of living pressures
The government announced several temporary measures to ease cost of living pressures for Australians. These include:
- The fuel excise (tax) has been halved to 22c for the next 6 months, reducing the pressure of high fuel prices. Motorists will see the discount filter through to the pumps in the next 2 weeks
- A one-off $250 payment for eligible pensioners, welfare recipients, veterans, and concession cardholders in April 2022
- A one-off low- and middle-income tax offset of $420 is available from 1 July 2022.
Additional financial support for working families
The government has proposed to introduce a single Paid Parental Leave Scheme, which will combine the existing 18-week Paid Parental Leave Scheme with the 2-week Dad and Partner Pay Scheme. The revised scheme will apply equally to family units or single parents and provides 20 weeks of paid parental leave to be used how the household prefers. It’s hoped this change will help with gender equality and provide increased flexibility for families to manage work and care. This will be in place by no later than 1 March 2023.
The government has also made changes to make childcare more affordable for working families, removing the annual cap on the childcare subsidy and increasing the subsidy for second and subsequent children. This change came into effect in March 2022.
Changes we’d like to see
The Federal Budget 2022/23 didn't include any measures to address the gender super gap or to end the $5 billion a year issue of unpaid super payments. Both are changes which would have been welcomed by super funds and members alike.
Funding for super on Commonwealth Parental Leave Payments
The government has again missed the opportunity to fund SG payments on paid parental leave, something we’ve been advocating for – alongside other industry funds – for many years.
The lack of super payments on parental leave has a disproportionate effect on women and is a key factor in the ongoing gender super gap.
We’re big believers this change needs to happen, and we’ll continue advocating for fairer super payments for working mothers.
Measures to address unpaid super
Each year $5 billion in super goes unpaid by employers, leaving one in four Australians with less when they retire and having to work for longer. According to Industry Super Australia, unpaid super costs each affected worker $1,700 per year on average.
Keeping you up to date
Making sure you’re informed about changes to super and retirement is an important part of what we do. We provide updates in f.Ind our member eNewsletter, on our website and in On the Money our member magazine. Check your communication preferences in MemberOnline to keep up to date or give us a call on 1300 360 149.
This is a snapshot of the changes announced in the Federal Budget 2022/23. For more information and to view all the measures that were announced visit budget.gov.au.