2024/25 Federal Budget announcements that impact superannuation
16 May 2024
Paid super on Government Paid Parental Leave
The federal government will pay superannuation on Government-funded Paid Parental Leave (PPL) for parents of babies born or adopted on or after 1 July 2025 in a $1.1 billion budget initiative designed to boost women’s super-balances and close the gender retirement gap.
Treasurer Jim Chalmers, in his budget speech to Parliament on Tuesday night, said the decision would make the superannuation system fairer, “reduce the gender pay gap and benefit 180,000 families a year’’.
“We are very proud that this Budget extends superannuation to parents on paid leave,’’ Dr Chalmers said.
Brighter Super welcomes the decision to pay super on parental leave as an important step forward to help improve retirement outcomes for women.
About two thirds of all recipients of the parental leave scheme are women. Women typically retire with about 25% less in superannuation than men^.
The paid parental leave decision was the major change to superannuation in the 2024 budget after the government announced substantial changes last year.
Freeze on social security deeming rates
The budget also froze the Social Security deeming rate at current levels until 30 June 2025 to support age pensioners and other Australians reliant on income support to manage cost of living pressures.
Increasing fraud detection
Other initiatives in the budget on superannuation included a $187 million anti-fraud measure for the Australian Taxation Office (ATO) to strengthen its ability to detect, prevent and mitigate fraud against the tax and superannuation systems.
Support for employers to implement payday super
The budget also included $60 million over four years to increase the Productivity, Education and Training Fund in part to support workplaces to implement payday superannuation (where super is paid on payday rather than up to quarterly) which is due to take effect from 1 July 2026.
Pursuing unpaid superannuation entitlements
A crackdown on unpaid superannuation entitlements owed by employers in liquidation or bankruptcy through the Fair Entitlements Guarantee Recovery Program which is expected to result in $44.4 million in additional payments to employees super accounts over four years and $96.9 million over the medium-term.
Changes to superannuation in July
Decisions already taken on superannuation prior to the budget are due to come into effect from 1 July 2024.
These include:
•
a legislated increase in the superannuation guarantee (SG) levy to 11.5% from 11%.
•
a rise in the concessional super contribution cap to $30,000 a year from $27,500 a year.
A decision, announced in the 2023-24 budget, to increase the tax on the earnings of superannuation accounts with balances over $3 million by 15% to a total of 30% is yet to pass parliament. The measure is scheduled to take effect from 1 July 2025, if it becomes law.
We’re here to help
Brighter Super’s team of qualified professionals can provide advice and guidance on your superannuation and your future.
Our financial advice service can help you plan for a better financial future*. Members can receive limited advice on a single issue related to superannuation, at no additional cost. More comprehensive financial advice is also available, and fees will vary depending on the type and complexity of advice.
We also offer our members Super Health Check appointments over the phone or video call, at no additional cost. We look at your superannuation account, discuss different ways to grow it, and check that you are on track for a comfortable retirement.
Call us on 1800 444 396 to discuss the type of appointment that would suit you best.
^Source: Women’s Budget Statement https://budget.gov.au/content/documents.htm, 14 May 2024
*ESI Financial Services Pty Ltd (ESI Financial Services, ABN 93 101 428 782) (AFSL 224952) is a wholly owned entity of LGIAsuper. ESI Financial Services has engaged Industry Fund Services Limited (IFS) ABN 54 007 016 195, AFSL No 232514 to facilitate the provision of financial advice to Brighter Super members. Brighter Super Financial Advisers are Authorised Representatives of IFS. Additionally, Brighter Super has also engaged Link Advice Pty Limited ABN 36 105 811 336, AFSL No 258145 to provide Brighter Super members with access to limited personal advice over the phone in respect to Brighter Super products.
LGIAsuper Trustee (ABN 94 085 088 484) (AFSL 230511) (the Trustee) as trustee for LGIAsuper (ABN 23 053 121 564) (RSE R1000160) (the Fund) trading as Brighter Super. Brighter Super products are issued by the Trustee on behalf of the Fund. Brighter Super may refer to the Trustee or LGIAsuper as the context may be.
