Federal Budget 2023/24 – a focus on relieving cost of living pressures
On Tuesday, 9 May, Treasurer Jim Chalmers handed down the Federal Government’s budget for 2023/24. As expected, the aim was to produce a fiscally responsible budget that would help ease cost of living pressures for Australian households.
The Budget contained few proposed changes to super. We’ve unpacked these below, as well as some other proposed changes that may affect you.1
- Reduced tax concessions for super balances over $3 million
People with account balances over $3 million will incur an additional 15 per cent tax on earnings that exceed this balance. Super investment earnings are currently taxed at the concessional rate of 15% in accumulation and 0% in retirement.
From 1 July 2025, earnings on total super balances over $3 million will be taxed at 30 per cent, at the end of a financial year. Earnings on balances up to $3 million will continue to be taxed at the 15% concessional rate in accumulation, or 0% in retirement. This change will affect around 80,000 Australians with super accounts.
- Payment of super on payday
To help deliver better retirement outcomes for Australians, payment of super guarantee (SG) contributions will now be aligned with wage cycles. This is one of the most significant reforms to the administration of the SG in 30 years.
From 1 July 2026, employers will be required to pay their employees’ SG contributions at the same time as their salary and wages, instead of the current SG quarterly requirement. This means that if you’re paid fortnightly or monthly, your super will be too.
According to Industry SuperFunds, this basic change to super payments could give some Australian’s $50,000 more at retirement, helping to ensure more people get paid the super they’re owed and entitled to.
- Increased funding for ATO compliance to monitor unpaid super
The government will provide $27.0 million to the ATO to improve data matching capabilities to identify and act on cases of superannuation guarantee (SG) underpayment by employers. This measure is designed to ensure Australians are paid the superannuation they’re entitled to.
Non-super related announcements
Recognising the high cost of living for Australians, the Government has announced a range of targeted measures to assist those who need it most.
Some of these measures include:
- Electricity bill relief for eligible households and small businesses
- A 15 per cent increase on the maximum rates of the Commonwealth Rent Assistance
- An additional $2.2 billion in funding for the Pharmaceutical Benefits Scheme
- A $40 per fortnight increase for those on JobSeeker, Youth Allowance, Austudy and other income support payments
- A 15 per cent pay increase for aged care workers
- Bulk-billing incentive for GPs will be tripled, so more Australians can see a GP without incurring out of pocket expenses
- Cheaper childcare from 1 July this year to make it easier for parents and carers to participate in the workforce
- More equitable Parental Leave Pay – combining Parental Leave Pay and Dad and Partner Pay to a 20-week payment
- Ability for pensioners to earn up to $11,800 before their pension is reduced, under an extension of the once-off credit of $4,000 to the Work Bonus income bank measure.
This is a snapshot of the proposals announced in the Federal Budget 2023/24. For more information and an overview of all measures, visit budget.gov.au.
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, social channels 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.
1 At the time of publication, any budget announcements are proposals only, and shouldn’t considered final until legislation passes. We’ll keep you informed as developments occur.