The Treasurer Jim Chalmers delivered the 2023-2024 Federal Budget which largely focuses on measures to help ease cost-of-living pressures.
The following is a summary of superannuation announcements made but it is important to note that these measures have not yet been legislated. You can find out more about the Budget by visiting budget.gov.au.
Concessions available to superannuation balances in excess of $3 million
From 1 July 2025 the Government will reduce tax concessions for individuals with super balances that exceed $3 million.
Individuals with a total superannuation balance of less than $3 million will not be affected, meaning that super balances less than $3 million will continue to be taxed at 15 per cent, or tax free in the case of a retirement pension account (noting that the Transfer Balance Cap currently limits the amount that can be transferred into an account based pension to $1.7 million).
Individuals with a super balance of more than $3 million will have a tax rate of 30 per cent for earnings, up from 15 per cent. This change brings the headline tax rate to 30 per cent, up from 15 per cent, for earnings corresponding to the proportion of an individual’s total superannuation balance that is greater than $3 million. Earnings relating to assets below the $3 million threshold will continue to be taxed at 15 per cent or zero per cent if held in a retirement pension account.
The Government has indicated that defined benefit accounts will also be included in this measure.
From 1 July 2026, employers will be required to pay their employees’ super on the same day that they pay their salary and wages.
Currently, employers are only required to pay their employees’ Superannuation Guarantee (SG) on a quarterly basis. Switching to this new frequency is expected to deliver a number of benefits to employees. The new frequency will make it easier for employees to track their super payments and can help to boost their retirement savings by having their contributions invested on a more regular basis.
These changes are expected to improve retirement outcomes particularly for low-income and casual workers who are more likely to fall behind when super is paid infrequently.
Investing in ATO to identify unpaid super
The Government has also committed to investing $27 million in 2023-2024 to the Australian Taxation Office (ATO) to help identify and act on SG contribution underpayment by employers.
A further $13.2 million will be invested in a new ATO compliance system that will identify the over or underpayment of super contributions in near-real time.
Superannuation consumer advocate funding
The Government has pledged $5 million to super consumer advocacy over 5 years from 2023–24 to improve members’ experience with the super system.