Lots about taxes, not much about super
Published: 02 Apr 2019
Depending on where you sit, a live Federal Budget announcement that doesn’t actually mention the word ‘superannuation’ is either disappointing or a welcome relief.
Even finding references to super in the budget papers was like trying to find a needle in a haystack. This is unfamiliar territory for working Australians who’ve followed countless budgets over the years that have fiddled with the super system to varying degrees.
But gosh there was a lot about taxes, specifically about the Coalition delivering its budget promises ‘without increasing taxes’. The budget promises covered tax cuts, infrastructure, aged care, education, health, security, energy, cost of living, environment, essential services, regional Australia, the financial system, and a little bit of super.
Here are the proposals that may affect your super.
Changes to the super contribution rules
From 1 July 2020, the Government proposes to extend the age at which you can make voluntary super contributions from under 65 (currently) to age 65 and 66 – without having to meet the work test. Currently, you can only make voluntary concessional and non-concessional contributions if you work a minimum of 40 hours over a 30-day period.
The Government also proposes to extend access to the bring-forward rule for non-concessional (after-tax) contributions to Australians aged 65 and 66. Currently only those aged under 65 can utilise the bring-forward rule and make three years' worth of non-concessional contributions in a single year, for a total of $300,000.
Another proposal is to increase the age limit of those who are eligible to receive a spouse contribution. The proposed age is 74; currently it’s age 70.
Despite some speculation, there were no changes to contribution limits.
Support for Royal Commission recommendations
It’s fitting that a portion of the Budget be allocated to supporting the 76 recommendations from the Final Report of the recent Banking Royal Commission.
It’s proposed that over the next five years, $606.7 million will be invested. A key measure is the implementation of an industry-funded compensation scheme of last resort for affected consumers and small businesses who have eligible complaints dating back to 1 January 2008.
Additional resources are proposed to be allocated to banking ‘watchdogs’ such as the Australian Securities and Investments Commission (ASIC) and the Australian Prudential Regulation Authority (APRA) to ensure the recommendations are enforced and to strengthen the supervision and governance of the system.
Other proposals that may affect members
- Many of Energy Super’s new and existing members are apprentices, and so the Government’s apprenticeship incentive proposals may be of interest. The proposals involve funding for 80,000 new apprentices over five years. Employers will also benefit from an additional $4,000 in incentive payments to hire new apprentices.
- Suicide prevention and mental health awareness are issues that particularly affect the energy sector. While Energy Super provides support via a number of wellness programs, it was pleasing that these issues received significant attention in the Budget. The Government proposes to invest $461 million in youth mental health and suicide prevention strategies, including $111 million for 30 new headspace services by 2021, $152 million to reduce waiting lists and increased support for indigenous youth through mentoring and peer support programs.